Federal deficit predicted to soar in Canada

• Source: Xinhua
• [08:12 July 10 2009]
• Comments

The stimulus package and the economic downturn will push Canada's federal deficit to a cumulative 155.9 billion Canadian dollars (132.5 billion U. S. dollars) over the next five years, the government's spending watchdog said in a report Wednesday.

Parliamentary Budget Officer Kevin Page predicted a less rosy economic prospect than the government, saying more jobs are going to be cut and the economy will decline further in 2009 and 2010 before recovering in 2011.

He said that despite the government's stimulus plans, 1.2 million jobs will be shed over the next two years, resulting in a peak of 9.4 percent unemployment rate in 2010.

Finance Minister Jim Flaherty had predicted a mere 100 billion Canadian dollars (85 billion dollars) in cumulative deficit over five years, ending with a surplus in 2014.

Page also said Canada is going to be put in a permanent structural deficit, though the deficit is expected to improve starting from 2013.

He called for a debate on policies to help the country out of recession as soon as possible.