While the Canadian economy has seen robust economic growth over the last year, growth is expected to weaken substantially over the medium term. In addition, the economy faces substantial economic risks. Budget 2018 announced several new tax measures, but does little to address our declining competitiveness or set aside adequate resources to stimulate the economy during a future downturn.
While the government expects the deficit to continue improving over the next five years, the streak of red ink is expected to continue. The current deficit is projected to rise to $19.4 billion this fiscal year, up slightly from $17.7 billion last year.
The Conference Board of Canada’s projection is in line with the consensus forecast contained in the budget. We expect real economic growth of just 2.2 per cent in 2018, down from an estimated 3.0 per cent last year. Over 2019 to 2022, growth is projected to continue to slow.