Economists expect surge in Canada deficit

Analysts expect Prime Minister Mark Carney to push the federal government’s budget deeper into the red as Canada ramps up spending to bolster its military and infrastructure.

- By ERIK HERTZBERG AND Dana MORGAN

AMBER BRACKEN Associated Press

PRIME MINISTER Mark Carney said the shock of the U.S. trade war was widening the budget gap.

Canada’s budget deficit will be C$70 billion ($50.6 billion) this fiscal year, or more than 2% of gross domestic product, according to the median estimate in a Bloomberg survey of economists. That would be twothirds higher than the C$42 billion the government had forecast in December.

On Sunday, Carney confirmed he plans to run a “substantial” deficit, higher than last year’s shortfall of approximately C$48 billion. The widening budget gap is driven by the shock of the ongoing trade war with the US., he said, which has hit revenues and required spending to support industry and workers and grow investment.

“There's going to be implications for the deficit, but it'll build a much stronger Canada moving forward,” he told reporters.