An $18-billion deficit sounds alarming, but will it actually affect you?
While it’s too soon to know for sure what effect the Liberal deficit projection may have, monster deficits can lead to higher taxes and a lack of confidence in the economy.
According to Dan Kelly with the Canadian Federation of Independent Business, the big question is whether the government has a solid plan to get back in the black.
“Certainly, Canadians didn’t freak out during the election campaign about the prospect for modest deficits, as long as there was a strong plan to get out of them,” Kelly explains. “And remember, the Tories themselves ran deficits in the big recession that happened just a few short years ago.”
Yesterday’s $18-billion deficit prediction is five times higher than the Liberals’ projection three months ago, partly because of the state of the global economy and sagging oil prices. The Liberals have been trumpeting infrastructure investments as the best way to spur the economy.