BY TYLER DURDEN
MONDAY, JUL 07, 2025 – 05:20 PM
The federal government is on pace to post a $92-billion deficit this fiscal year — nearly double what was projected just four months ago, according to a new report from the C.D. Howe Institute. If accurate, it would mark the second-largest deficit in Canadian history, trailing only the $327.7-billion shortfall of 2020-21 during the pandemic, according to National Post.
“The picture is definitely not pretty,” said Alexandre Laurin, C.D. Howe’s vice-president, who co-authored the report with William Robson and Don Drummond.
The think tank now forecasts annual deficits of over $77 billion for the next four years, far higher than the government’s projections in its most recent budget — which is now more than a year old. The report criticizes the government’s delay in tabling a new budget, saying, “Delaying a budget until the fiscal year is more than half over is never good, but Canada’s current high-spending trajectory makes this delay especially bad.”
National Post writes C.D. Howe attributes the worsening outlook to rising defence spending, Trump-era tariffs, tax cuts, and the scrapped digital services tax. It also questions whether promised revenue boosts from fines, penalties, and savings will materialize.
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