Business
Parliamentary Budget Officer forecasts bigger deficits for years to come
From the Canadian Taxpayers Federation
Author: Franco Terrazzano
“Every penny collected from the GST will now go to cover interest charges on the Trudeau government’s credit card”
The Canadian Taxpayers Federation is calling on the federal government to cut spending and balance the budget following today’s Parliamentary Budget Officer report forecasting higher deficits.
“Budget 2024 was bad, but the PBO report forecasts the Trudeau government will be running even bigger deficits,” said Franco Terrazzano, CTF Federal Director. “This PBO report should be a wake-up call for Prime Minister Justin Trudeau: get a hold of your spending or interest charges will keep ballooning.”
The PBO projects a $46-billion deficit this year. Budget 2024 projected a $40-billion deficit.
“PBO’s projected budgetary deficits are $5.3 billion higher annually, on average, over 2023-24 to 2028-29,” according to the report.
In Budget 2023, Finance Minister Chrystia Freeland said the government would find “savings of $15.4 billion over the next five years.”
However, “in Budget 2024, the government announced $61.2 billion in new spending,” according to the PBO. “Since Budget 2021, the government has announced a total of $251.6 billion in new spending measures.”
Interest charges on the debt are expected to cost taxpayers $54 billion this year, according to Budget 2024.
“Every penny collected from the GST will now go to cover interest charges on the Trudeau government’s credit card,” Terrazzano said. “Trudeau must balance the budget, cut spending and stop wasting more than $1 billion every week on interest charges.”
Alberta maintains a balanced budget while ensuring pressures from population growth are being addressed.
Alberta faces rising risks, including ongoing resource volatility, geopolitical instability and rising pressures at home. With more than 450,000 people moving to Alberta in the last three years, the province has allocated hundreds of millions of dollars to address these pressures and ensure Albertans continue to be supported. Alberta’s government is determined to make every dollar go further with targeted and responsible spending on the priorities of Albertans.
The province is forecasting a $4.6 billion surplus at the end of 2024-25, up from the $2.9 billion first quarter forecast and $355 million from budget, due mainly to higher revenue from personal income taxes and non-renewable resources.
Given the current significant uncertainty in global geopolitics and energy markets, Alberta’s government must continue to make prudent choices to meet its responsibilities, including ongoing bargaining for thousands of public sector workers, fast-tracking school construction, cutting personal income taxes and ensuring Alberta’s surging population has access to high-quality health care, education and other public services.
“These are challenging times, but I believe Alberta is up to the challenge. By being intentional with every dollar, we can boost our prosperity and quality of life now and in the future.”
Midway through 2024-25, the province has stepped up to boost support to Albertans this fiscal year through key investments, including:
- $716 million to Health for physician compensation incentives and to help Alberta Health Services provide services to a growing and aging population.
- $125 million to address enrollment growth pressures in Alberta schools.
- $847 million for disaster and emergency assistance, including:
- $647 million to fight the Jasper wildfires
- $163 million for the Wildfire Disaster Recovery Program
- $5 million to support the municipality of Jasper (half to help with tourism recovery)
- $12 million to match donations to the Canadian Red Cross
- $20 million for emergency evacuation payments to evacuees in communities impacted by wildfires
- $240 million more for Seniors, Community and Social Services to support social support programs.
Looking forward, the province has adjusted its forecast for the price of oil to US$74 per barrel of West Texas Intermediate. It expects to earn more for its crude oil, with a narrowing of the light-heavy differential around US$14 per barrel, higher demand for heavier crude grades and a growing export capacity through the Trans Mountain pipeline. Despite these changes, Alberta still risks running a deficit in the coming fiscal year should oil prices continue to drop below $70 per barrel.
After a 4.4 per cent surge in the 2024 census year, Alberta’s population growth is expected to slow to 2.5 per cent in 2025, lower than the first quarter forecast of 3.2 per cent growth because of reduced immigration and non-permanent residents targets by the federal government.
Revenue
Revenue for 2024-25 is forecast at $77.9 billion, an increase of $4.4 billion from Budget 2024, including:
- $16.6 billion forecast from personal income taxes, up from $15.6 billion at budget.
- $20.3 billion forecast from non-renewable resource revenue, up from $17.3 billion at budget.
Expense
Expense for 2024-25 is forecast at $73.3 billion, an increase of $143 million from Budget 2024.
Surplus cash
After calculations and adjustments, $2.9 billion in surplus cash is forecast.
- $1.4 billion or half will pay debt coming due.
- The other half, or $1.4 billion, will be put into the Alberta Fund, which can be spent on further debt repayment, deposited into the Alberta Heritage Savings Trust Fund and/or spent on one-time initiatives.
Contingency
Of the $2 billion contingency included in Budget 2024, a preliminary allocation of $1.7 billion is forecast.
Alberta Heritage Savings Trust Fund
The Alberta Heritage Savings Trust Fund grew in the second quarter to a market value of $24.3 billion as of Sept. 30, 2024, up from $23.4 billion at the end of the first quarter.
- The fund earned a 3.7 per cent return from July to September with a net investment income of $616 million, up from the 2.1 per cent return during the first quarter.
Debt
Taxpayer-supported debt is forecast at $84 billion as of March 31, 2025, $3.8 billion less than estimated in the budget because the higher surplus has lowered borrowing requirements.
- Debt servicing costs are forecast at $3.2 billion, down $216 million from budget.
Related information
Business
Trump’s government efficiency department plans to cut $500 Billion in unauthorized expenditures, including funding for Planned Parenthood
From LifeSiteNews
Elon Musk and Vivek Ramaswamy shared their plans to ‘take aim’ at ‘500 billion plus’ in federal expenses, including ‘nearly $300 million’ to ‘progressive groups like Planned Parenthood.’
Elon Musk and Vivek Ramaswamy are planning to ax taxpayer funding for Planned Parenthood as part of their forthcoming work for the next Trump administration, they revealed in a Wednesday op-ed in The Wall Street Journal.
The businessmen have been appointed by President Donald Trump to lead a new Department of Government Efficiency (DOGE), which will work from outside the official government structure to cut wasteful government spending and excess regulations, as well as “restructure federal agencies,” as Trump announced last week on Truth Social.
Musk and Ramaswamy shared Wednesday that as part of their work at DOGE to downsize government spending, they will be “taking aim at the $500 billion plus in annual federal expenditures that are unauthorized by Congress or being used in ways that Congress never intended,” thereby “delivering cost savings for taxpayers.”
They specifically called out Planned Parenthood as one institution that will lose taxpayer funding once DOGE kicks into gear. In their op-ed, the duo said the federal expenditures they plan on cutting includes the “nearly $300 million” dedicated “to progressive groups like Planned Parenthood.”
Musk and Ramaswamy also reportedly will take aim at the “$535 million a year to the Corporation for Public Broadcasting and $1.5 billion for grants to international organizations,” according to Catholic Vote, although they have not shared all of the federal spending they plan to cut or reduce.
“With a decisive electoral mandate and a 6-3 conservative majority on the Supreme Court, DOGE has a historic opportunity for structural reductions in the federal government,” the business duo wrote. “We are prepared for the onslaught from entrenched interests in Washington. We expect to prevail.”
Mogul and X owner Musk, who was outspoken before his DOGE appointment about the big problem of waste, noted last week that if the government is not made efficient, the country will go “bankrupt.”
He reposted a clip from a recent talk he gave in which he explained that not only is our defense budget “pretty gigantic” — a trillion dollars —but the interest the U.S. now owes on its debt is higher than this.
“This is not sustainable. That’s why we need the Department of Government Efficiency,” Musk said.
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