OTTAWA—The Bank of Canada’s latest economic forecast puts the federal government on track to run a $1 billion deficit in 2015-16, casting doubt on the Conservatives’ promise to balance the election-year books, says a new analysis by the parliamentary budget office.
The results of the calculations, based on the downgraded projection released last week by the central bank, also trim the government’s expected surpluses over the next two years.
The bleaker fiscal outlook, released Wednesday, July 22, surfaces as political parties are pitching economic policies to voters ahead of the October election.
In its April budget, the Harper government predicted a string of surpluses, starting with $1.4 billion for this election year. The government forecast surpluses of $1.7 billion in 2016-17 and $2.6 billion in 2017-18.
But the budget office projects the government producing a $1-billion shortfall in 2015-16 followed by smaller surpluses of $600 million and $2.2 billion over the next two years.
Their calculations used fresh projections by the Bank of Canada, which last week lowered its outlook for economic growth in 2015 to 1.1 percent, down from 1.9 percent earlier this year.
