All Eyes on Fiscal Policy: Canada’s Two-Year Government Outlook

The Conference Board of Canada, 12 pages, October 13, 2021
Issue Briefing
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This quarterly economic forecast presents the medium-term outlook for the Canadian economy. This release focuses on government. For an overview of all major components of the economy, go to the Canadian Outlook main page.

Document Highlights

  • Canadians went to the polls on September 20 to determine who will be charge of navigating the economic recovery over the next few years. The governing Liberals held onto power for a third mandate, with many tough decisions ahead.
  • After 18 months of record stimulus, the government will have to balance the winding down of its massive support spending with the need to avoid harming the nascent recovery.
  • Federal estimates peg the deficit at $155 billion for 2021–22, which would be the second-highest deficit in Canadian history (behind last year’s eye-popping $354 billion shortfall).
  • The collective provincial deficit pales in comparison to the federal number but, at $63 billion, is more concerning on a structural level.
  • The next two decades will be filled with belt-tightening and, potentially, higher taxes as governments attempt to navigate their way out of their fiscal holes.

Table of Contents

Key Findings
Government Snapshot
Federal Fiscal Outlook
The CERB, CRB, and CEWS Programs
Provincial and Municipal Fiscal Outlook
Government Investments

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