Canada Faces Urgent Fiscal Crisis Ahead of Budget 2025

UPDATE: Canada is on the brink of a fiscal crisis as interim parliamentary budget officer Jason Jacques warns of a looming deficit of $68.5 billion this year, up from $51.7 billion last year, just weeks before the federal budget is set to be tabled on November 4, 2025. Jacques describes the situation as Canada being “at the precipice,” raising alarms about the sustainability of federal finances.

In an interview with CTV’s Question Period, Jacques expressed significant concerns over the federal debt-to-GDP ratio, which is projected to surpass 43% within the next five years. This worrying trend highlights the government’s diminishing fiscal space, leaving little room for economic support measures amid geopolitical challenges, including the previous U.S. tariff regime under former President Donald Trump.

Jacques emphasized the urgency of reform, stating, “We’re at a point where, based upon our numbers, things cannot continue as they are.” He acknowledged that while Canada hasn’t “gone over the precipice,” the nation is “looking out over the cliff,” reflecting the anxiety many Canadians feel regarding their economic future.

The upcoming budget, which will be Mark Carney’s first as Prime Minister, is expected to balance themes of austerity and investment. Jacques pointed out the “narrow path” the government must navigate, requiring possible spending cuts and revenue increases to stabilize the economy.

The ramifications of this budget could be profound for Canadians, particularly those in hard-hit sectors. Jacques indicated that significant changes will be necessary for the government to effectively manage its finances moving forward.

With the federal government last releasing a full budget in April 2024, the approaching budget is critical in setting the course for Canada’s economic strategy. Jacques reiterated the need for parliamentarians to understand the fiscal landscape as they prepare for Budget 2025.

Watch the full interview with Jason Jacques on CTV Question Period airing Sunday at 11 a.m. ET for more insights into this urgent fiscal situation. As Canada stands on the edge, the decisions made in the coming weeks will shape the nation’s economic future.