The Red Ink Is All Over Trudeau’s First Budget

A fading Canadian economy is putting Justin Trudeau’s optimism to the test. On Feb. 22 growth projections for 2016 were lowered from 2 percent to 1.4 percent. Canada’s dollar fell almost 10 percent against the greenback in Trudeau’s first 11 weeks in office. Now his finance minister has previewed the March 22 budget by revealing that the deficit will be higher than Trudeau’s Liberal Party anticipated.

All three of the commitments Trudeau gave during the autumn campaign to quell concerns about his fiscal management are falling by the wayside. He pledged the budgetary shortfall would be no more than C$10 billion ($7.3 billion) a year. Minister of Finance Bill Morneau is signaling that the figure will be closer to C$30 billion ($22 billion) once campaign promises are factored in. That will make it unlikely that Trudeau can fulfill his other two commitments: to balance the budget by 2019 and keep decreasing the national debt as a share of the economy.