Finance Minister Chrystia Freeland stated that the federal government could spend even more without jeopardizing national finances, despite a recent report indicating that this year’s deficit has exceeded initial projections by 17%. Speaking to reporters, Freeland responded to concerns raised by the Parliamentary Budget Office (PBO) about the government missing its deficit target for 2024.“We recognize the importance of fiscal responsibility because we know that is what makes it possible to have inflation coming down, for us to have interest rates coming down,” said Freeland. “At the end of the day, we know what matters to Canadians is what they are experiencing in their lives.”Blacklock's Reporter said Freeland emphasized that, while public finances remain sustainable, she was not advocating for increased spending. “We could be spending even more and public finances would still be sustainable,” she noted. “I am not advocating for that. I am simply saying the Budget Office report was very, very clear.”The PBO report, Economic And Fiscal Outlook October 2024, highlighted that the current deficit stands at $46.4 billion, a significant increase from the $39.8 billion projected in April and well above Freeland’s original estimate of $35 billion. The report attributed the rise to new government spending initiatives. Despite this, Freeland downplayed the numbers, remarking, “That is just a Budget Office report. It’s not the final numbers.”The PBO also warned that debt servicing costs are set to reach $52.8 billion this year, surpassing federal expenditures on healthcare and national defense. These costs are expected to climb to a record $60 billion by 2027. Freeland, however, maintained that these charges remain manageable, reiterating her stance from 2023 testimony in the Commons finance committee: “Our debt service charges are low in Canada’s historical context and they are low compared to what our peers in the G7 are paying.”Conservative MP Adam Chambers (Simcoe North, Ont.) criticized the government’s approach, questioning the long-term impact of persistent deficits. “You have to pay the money back,” Chambers said. “The government said it was just going to run a couple of small deficits when it started, and now they are as far as the eye can see.”Freeland responded that context was key, repeating her assertion that “our debt service charges are absolutely handleable” and reaffirming the government’s commitment to balancing spending with fiscal responsibility.
