Frequently Asked Questions: Update of Economic and Fiscal Projections

What is the key conclusion of this year’s Update of Economic and Fiscal Projections?

  • The Government remains on track to balance the budget in 2015, and achieve a surplus of $1.9 billion in 2015–16.
  • The federal deficit has been reduced by more than 90 per cent since 2009–10 and direct program spending has fallen for four consecutive years, the first time since 1961–62.

Why is the return to balance so important?

  • Balancing the budget is not an end in itself. It is a means to further increase Canada’s economic potential, improve employment opportunities for Canadians and raise our standard of living.
  • Maintaining confidence in Canada is crucial to strengthening Canada’s already sound fiscal position. It promotes job creation and opportunities for all Canadians.
  • The stability of balanced budgets inspires confidence among Canadians, as well as international investors. 
  • Balanced budgets help keep interest rates low, attract investment, keep taxes low and ensure sustainable social programs.

What is the state of the Canadian economy, and what are the risks to its continued growth?

  • The Canadian economy has remained resilient in the face of global economic uncertainty. Over 1.2 million jobs have been created since the depths of the recession. 
  • Canada has the lowest tax burden as a percentage of gross domestic product in over 50 years.
  • Nevertheless, Canada is not immune to developments outside its borders. Global demand has softened, and the prices of many Canadian exports—particularly resources—are down.

What is the Government doing to protect the Canadian economy?

  • The Government continues to take the necessary steps to better position Canada as a strong competitor in the global economy. 
  • In the face of a global economic recovery that continues to be fragile and uneven, the Government will remain focused on supporting growth, creating jobs and returning to budgetary balance in 2015 without raising taxes or reducing important transfers that support health care and social services.
  • By focusing on the long view, and taking strong, decisive action whenever necessary along the way, Canada has grown stronger and will continue to do so.