PBO and Finance Canada Long-term Projection Comparison

Press Release

January 23, 2018

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PBO and Finance Canada Long-term Projection Comparison.pdf
Summary
This report provides a comparison of long-term economic and fiscal projections prepared by Finance Canada and PBO in 2017.

• PBO’s projection of real GDP growth is slightly lower than Finance Canada over 2017-2022 and 2023-2035. Over the period 2036-2055, the difference between the projections widens to 0.2 percentage points annually (1.6 per cent versus 1.8 per cent), on average.
• Both PBO and Finance Canada project the federal budgetary balance (relative to the size of the economy) to increase over the long term.
• Relative to the size of the economy, PBO and Finance Canada project federal government debt to decline over the long term.
• Based on PBO and Finance Canada projections, we estimate that over 2017 to 2055 the federal government could increase spending or reduce taxes by 0.6-0.7 per cent of GDP (roughly $13 billion in current dollars) annually while maintaining fiscal sustainability.

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