Canadian Manufacturing

5 things that could push the federal deficit beyond $20B

Infrastructure, jobs and training measures and Bombardier aid top the list of things that could inflate an already soaring deficit



OTTAWA—Finance Minister Bill Morneau released updated fiscal projections Feb 22 that predict an $18.4-billion deficit in 2016-17. That number is expected to grow even larger before the budget is tabled March 22.

Here are five things that could push the Liberal budgetary shortfall beyond $20 billion next year:

Cash for infrastructure. The Liberal government made an election-campaign promise to invest at least $5 billion next year on infrastructure, which the party argues will kick-start the sluggish economy and generate jobs. The government has also sent signals that it is considering an increased cash injection.

Help for jobs and training. The government promised to spend nearly $2.2 billion in 2016-17 to enhance jobs and training, by taking steps such as increasing student grants and creating a youth employment strategy.

The Liberal version of the child benefit plan. If introduced, the party’s platform projects this program would have a net new cost of $1.8 billion next year once it replaces the plan introduced by its Conservative predecessors.

Bombardier. The Liberals are under pressure to open the public wallet to help cash-strapped aerospace manufacturer Bombardier Inc., which made a controversial plea to Ottawa for funding to help boost its troubled CSeries aircraft line. The request is believed to be $1.3 billion.

Assistance for aboriginal Canadians. The Liberals are on the hook for a number of uncosted promises, including several for Canada’s Aboriginal Peoples: ending boil-water advisories on aboriginal reserves within five years; delivering on all 94 recommendations from the Truth and Reconciliation Commission; and lifting the two-per-cent cap on federal funding for First Nations communities. Morneau confirmed Monday that next month’s budget will contain measures for indigenous Canadians.

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