Parliamentary Budget Officer Yves Giroux has released the 2019 Economic and Fiscal Update, in it, he urges MPs to take a serious look at how the government plans to cut spending, while also pointing an increasing debt-to-GDP ratio.
According to the PBO report released on Thursday, the federal government has stated it will cut $7.5 billion over five years, equating to a cut of $1.5 billion per year, but has provided “incomplete” information regarding where and how the cuts will be made.
“No details have been published regarding the process or the criteria that will be used to assess programs, making it difficult to determine the viability of these savings,” the PBO report states. “Parliamentarians may wish to request details on the specific mix of tax policies and operational actions the government plans to introduce to reach the $1.5-billion annual target.”
The office also raised concerns over the potential increase in the debt-to-GDP ratio.
“The fiscal outlook… does not meet the government’s commitment to reducing debt relative to GDP, as the government is forecasting a 31 percent debt-to-GDP ratio in 2019-20 and 2020-21, higher than 30.8 percent in 2018-19,” Thursday’s report states. “A combination of additional spending restraint, revenue increases or faster economic growth would be needed prior to March 31, 2020, to put the debt-to-GDP ratio on a declining path in 2019-20.”
The increase in debt-to-GDP notably directly contradicts statements made by the PM and his steam, including in the most recent mandate letter given to Mr. Morneau.