Canada’s PBO slashes economic forecasts, warns debt will rise
Trade talks between Canada and the U.S. broke down at the end of August followed by a new round of U.S. tariffs and Canadian counter-tariffs.
The Parliamentary Budget Office has reduced its economic growth projections for Canada this year and next, citing increased U.S. tariffs and Canadian retaliatory measures. The federal budget watchdog now expects real gross domestic product growth of 0.9 per cent in 2023 and 1.5 per cent in 2024, a drop from earlier estimates of 1.1 per cent and 1.6 per cent respectively.
Trade negotiations between Canada and the U.S. ended at the end of August, leading to new U.S. tariffs and Canadian counter-tariffs. The PBO also forecasts a budgetary deficit of $63.3 billion for the 2026-27 fiscal year, rising to $70.2 billion in 2027-28. This is an increase of $3 billion per year on average over the 2026-27 to 2030-31 period, as new spending measures outweigh higher revenues.
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