Budget watchdog forecasts deeper deficits than Ottawa projected in spring update

The federal government’s budget watchdog says Ottawa has less than a one per cent chance of maintaining the key fiscal anchor of shrinking the deficit as a share of the economy every year.

Parliamentary Budget Officer Annette Ryan today released her office’s first economic and fiscal update since she assumed the role in April.

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The budget watchdog predicts annual deficits will average $4.6 billion higher than Ottawa projected in its spring economic update.

The budget office expects the deficit for this fiscal year will edge down slightly to $71.8 billion — about $6.5 billion higher than Ottawa’s spring projection.

Ryan argues that annual deficits will be deeper than Ottawa expects, mainly because of lower income tax revenue and higher program expenses.

While the forecast does see the federal government’s deficit-to-GDP ratio falling over the five-year horizon, the report estimates the odds of Ottawa showing a decline in the deficit every year at less than one per cent.

This report by The Canadian Press was first published June 4, 2026.