Canada's public debt charges have risen 34%.
Finance Minster Chrystia Freeland's spring budget projected a CAD39.8 billion deficit in the fiscal year that began April 1 or 1.3% of GDP, pledging another new "fiscal anchor" of keeping shortfalls below CAD40 billion. Experts have told MNI that ahead of an election due late next year the Liberals may bring in major new spending. (See: MNI INTERVIEW: Canada Budget Leans To Largesse - CFIB's Kelly)
Since the budget, the government has announced new spending commitments including a plan to boost military spending to 2% of GDP by 2032 to meet a NATO target.
Canada hasn’t run a substantial surplus since 2008, though the country has kept triple-A credit ratings with small deficits as a share of GDP. The government projects the deficit will fall below 1% of GDP in two years and remain below that mark, while debt as a share of GDP falls over each of the next five years.
Program spending continues to grow faster than the economy's potential. BOC Governor Tiff Macklem has said major fiscal expansion could make the inflation fight a bit harder, though he's now cut interest rates twice as core prices settle down.
