Feds to post deficits $8B bigger than expected over next two years: PBO report

OTTAWA — The federal budget watchdog says the Trudeau government is on track to run deficits nearly $8 billion deeper than expected over the next two years.

A new analysis by the parliamentary budget officer estimates Ottawa will post a $22.1-billion shortfall this fiscal year, which would be $4 billion more than the government’s projection of $18.1 billion in its February budget.

For 2019-20, Jean-Denis Frechette’s team predicts a $21.4-billion deficit, $3.9 billion higher than the government’s forecast of $17.5 billion.

The report says the more-substantial deficit projections are mainly caused by higher then expected costs for the government from public debt charges, direct program expenses and children’s benefits.

The budget office also estimates there is approximately a five per cent chance the federal budget will be balanced or will show a surplus in 2020-21.

The report, however, does contain some figures that are more positive than Ottawa’s projections, including smaller-than-expected deficits for 2017-18, by $600 million, and for 2022-23, by $1.7 billion.