The recession is over; so we’ll be back in the black soon, right? Well, not quite. A report from the Parliamentary Budget office predicts that “the downward trend in potential GDP growth observed since 2000 will continue…averaging 1.9 per cent over the 2009 to 2010 period.” The PBO also says Canada will continue to struggle with structural budget deficits, even after the economy rebounds. Structural deficits are deficits that persist even when the economy is expanding. As the name suggests, they indicate a “structural” problem: a systemic gap between income and spending. In the 2008-9 fiscal year, Ottawa went $56 billion in the red.
A grim forecast from the PBO
Parliamentary Budget Office warns of "structural deficits"
FILED UNDER: Canada