As reported by the Fraser Institute on July 22, the Liberal platform from April’s election campaign projected a $62.3bn deficit for the fiscal year—roughly $20bn more than the Trudeau government’s previous forecast.
The platform included increased spending on infrastructure, CBC programming, and seniors’ benefits, as well as tax policy changes that reduced expected revenue from capital gains, personal income, and GST for first-time homebuyers.
In addition, Prime Minister Mark Carney’s government committed to raising defence spending to 2 percent of GDP in response to US pressure, adding $9.3bn in new spending this fiscal year.
The cancellation of the digital services tax was estimated to cost $1.2bn in lost revenue.
The Fraser Institute said that these changes put the projected federal shortfall above $70bn for the year.