Trudeau Announces Staggering $61.9 Billion Budget Deficit

Prime Minister Justin Trudeau’s government unveiled a stunning $61.9 billion year-end deficit just hours after Chrystia Freeland resigned from cabinet, sending shockwaves through Ottawa on Monday.

Trudeau’s spending spree created a larger-than-expected deficit in the government’s budget last year, raising concerns about the country’s fiscal health and laying the groundwork for a difficult economic landscape ahead.

Canada’s budget deficit for the fiscal year ending March 31 was $61.9 billion ($43.45 billion), more than half of what was forecast last year. However, it fell short of one of three key fiscal objectives that Finance Minister Chrystia Freeland established.

This year’s fiscal report, the Fall Economic Statement, was substantially delayed, leading economists and analysts to speculate that the government would have exceeded its fiscal projections.

The update comes after Freeland resigned due to differences with Trudeau regarding government expenditure.

Freeland, the finance minister since 2020, said she had no choice but to resign after the prime minister approached her on Friday about shifting her to another cabinet position.

She also took a final shot at Trudeau’s handling of Canada’s economy, condemning Justin’s “costly political gimmicks” and urging him to collaborate with provincial premiers to face Trump’s tariff threat.

Trudeau Slammed Over Debt

In November 2023, Freeland predicted a deficit of $40.1 billion ($28.17 billion) in 2023-24 and a debt-to-GDP ratio of 42.4% in 2024-25 that would continue to fall.

She vowed to reduce the deficit-to-GDP ratio in 2024-25 and to keep deficits under 1% in 2026-27 and subsequent years. While the government met its debt-to-GDP objective, its deficit-to-GDP ratio increased to 2.1% from 1.4% expected.

The government expects GDP growth to be 1.7% next year, down from 1.9%.

Meanwhile, opposition parties have expressed concern over the ballooning deficit, challenging Trudeau’s economic management and calling for stricter budgetary limits.

Conservative Party leader Pierre Poilievre slammed the government’s policy, saying, “Canadians deserve a plan that prioritises fiscal responsibility and economic stability, not a never-ending cycle of debt.”

Poilievre called on Trudeau to allow an immediate vote on the fall economic statement so that the government could be toppled, triggering an election. He stated that Freeland’s resignation demonstrates the government’s “spiralling out of control…at the worst possible time.”

“For the past decade, nine years, Freeland has been Mr. Trudeau’s most trusted minister. She knows him better than anybody else and recognizes that he is out of control.

NDP Leader Jagmeet Singh urged the prime minister to resign, saying “all options are on the table.” He did not say whether he meant supporting the Conservatives in a vote of no confidence.

The rapid succession of events also rekindled pre-existing tensions inside the Liberal ranks, with several backbencher MPs repeating their calls for the prime minister to go.

Trudeau will meet with the MPs later tonight. Dozens of them are anticipated to urge him he needs to quit for mismanaging his relationship with Freeland.

Liberal MP Wayne Long, who was involved in a prior attempt to unseat Trudeau, stated that around one-third of the 153 sitting Liberal MPs want the prime minister to resign immediately, another third are undecided, and the other third are self-proclaimed Trudeau supporters.

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