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Freeland pledges to release fiscal update this fall

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Canada’s Deputy Prime Minister and Minister of Finance Chrystia Freeland arrives at a news conference with Minister of Employment, Workforce Development and Disability Inclusion Carla Qualtrough in Ottawa, Ontario, Canada November 24, 2021. REUTERS/Blair GableBLAIR GABLE/Reuters

Finance Minister Chrystia Freeland confirmed for the first time Wednesday that the Liberal government will be releasing a fiscal update this fall.

Speaking with reporters Wednesday, Ms. Freeland said that her April budget was based on a “prudent” forecast that included a declining debt to GDP ratio and she suggested that remains an important yardstick. She also noted that major rating agencies continue to maintain Canada’s triple-A credit rating.

“We know how important it is to be transparent with Canadians about the public finances and to update regularly. We will release some form of fiscal update this fall and we’ll have more specifics to share with you in the coming days,” she said.

“The fiscal track we presented in the budget in April was prudent and careful. And that’s why the ratings agencies have reaffirmed our triple-A rating. [The budget] shows a steadily declining debt to GDP ratio and that is important and that’s something our government is looking at closely,” she said.

A fiscal update is traditionally a restating of federal revenue and spending estimates that takes into account the latest available data and provides new forecasts for Ottawa’s bottom line. Fiscal updates occasionally are expanded into so-called mini budgets if they include new spending or tax announcements.

The April federal budget projected the deficit would be $154.7-billion for the current 2021-22 fiscal year, down from a projected $354.2-billion the previous year, during the first waves of the pandemic.

The Liberal platform that was released ahead of the September election projected a $156.9-billion deficit this year and a deficit of $62.6-billion in the following year. The platform said the debt to GDP ratio would decrease slightly from 51.2 per cent to 49.2 per cent over five years.

Scotiabank economist Rebekah Young said in a recent note on what to expect in a fiscal update that the April budget likely remains a reliable guide in terms of the state of federal finances.

“The fiscal path should look largely familiar,” she wrote. “The debt profile should show slight improvements relative to the government’s last update.”

Ms. Young said stronger than projected economic growth has more than outpaced the new spending announced since April.

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