New report questions the credibility of the government’s fiscal anchors
Ottawa, ON – January 22, 2024 – With Canada facing higher debt-servicing costs, lower growth forecasts and increased spending pressures, a new report by the Business Council of Canada (BCC) raises questions about the federal government’s proposed fiscal anchor.
“Analyzing the Federal Government’s Fiscal Anchors” assesses the government’s commitment in the 2023 Fall Economic Statement to maintain a declining deficit-to-GDP ratio over the next few years and keep deficits below 1 per cent of GDP in fiscal years 2026-2027 and future years. After reviewing the Freeland-Trudeau track record on fiscal responsibility and offering ten observations, the report concludes that it is “very improbable” for the government to meet its new anchor.
The report informed a letter by Goldy Hyder, BCC president and CEO, ahead of the cabinet retreat in Montreal that urged Prime Minister Trudeau to implement three key priorities for Canadians:
- Adopting a meaningful fiscal anchor
- Delivering a Plan to Improve Impact Assessment and Permitting
- Seizing the energy transition opportunity
“Failing to address the above priorities… invites greater uncertainty and exposes Canadians to a further erosion of their living standards,” reads the letter.
