Canada’s economy is in a much worse state than what we expected.
And this isn’t just us speaking. The federal government itself admitted that, at the rate its going, Canada will end up in mountains of debt and deficit in the coming decades. It may create a situation where the federal government finances can crumple.
In an attempt to sweep the shocking projections under the rug, the federal government quietly released the financial report just two days before Christmas. As the politicians were on their holiday break and the media was reveling in the Christmas spirit, no one took notice.
But they’re noticing now.
Prime Minister Justin Trudeau promised that he would balance the country’s budget in 2019.
This seems like a distant dream in the light of the recent financial figures. The long-term economic projections suggest that the dream of the balanced budget won’t be realized until 2055, or perhaps even later.
In addition to the budget deficits, the debt may also reach beyond $1.55 trillion in the long run. That’s more than double the federal debt right now. What we also need to keep in mind that such projections may not have included the possibility of an unexpected financial crisis like
the Great Recession.
The underlying causes
The biggest underlying cause for such a dismal projection is the federal government’s expenditures while the Liberals continue to pump debt into the Canadian economy. At this rate, the federal deficit can swell up to around $40 billion.
Another potential cause of the bleak economic outlook is the rapidly retiring baby boomer generation. As the older people retire, Canada’s workforce and their participation in it will shrink considerably. It’s happened for the first time in the country’s history that there are more people older than 65 than there are people younger than 15.
One thing, however, is certain.
Canada’s economy won’t recover anytime soon.