Economic and Fiscal Outlook for November 2015

The Canadian economy has deteriorated in the last six months, according to a press release from the Office of the Parliamentary Budget Officer (PBO), and growth is expected to be slower than anticipated over the next few years. A weaker economy translates into larger deficits over the medium term than the PBO forecast in April, states the report, which was released November 10.

It based these recent forecasts on the Conservative policy measures announced in the April 2015 budget, stating the “PBO will provide an updated outlook including measures proposed by the new government when further details are released during the new legislative session.”

“We have revised down nominal GDP—a broad measure of the government’s tax base—by $20 billion each year, on average, between 2015 and 2020 compared with our outlook provided to the House of Commons Standing Committee on Finance on 28 April 2015. The downward revision results from both lower real GDP levels and lower economy-wide prices.”

The good news? According to the PBO, “Despite these deficits the federal debt-to-GDP ratio is projected to decline from 31 per cent of GDP in 2014-15 to 26.2 per cent of GDP in 2020-21.”

Source: Parliamentary Budget Officer

Knowledge Bureau will provide the more recent updates to tax and economic changes at the January Distinguished Advisor Workshop. For more information and early registration tuition reductions, click here.