It's structural

Stephen Gordon notes that the finance department considers the federal deficit to be structural.

Notwithstanding the Conservatives’ repeated rejections of the PBO claim, last year’s budget was an implicit admission that a significant portion of the federal government’s deficit was structural. If the Conservatives really believed that the deficit was purely cyclical, there would have been no need to adopt austerity measures in order to bring the budget back into balance.

The estimates released last Friday are a final confirmation of the problem.

This Sunday marks the fourth anniversary of Stephen Harper’s election promise that a Conservative government would “never go back into deficit.” The projected return to surplus has bounced around a bit since then. In April, Scott Clark and Peter DeVries doubted whether the latest target was achievable.