OTTAWA — The Bank of Canada's latest economic forecast puts the federal government on track to run a $1-billion deficit in 2015-16, says a new analysis released Wednesday by the parliamentary budget office.
The results of the calculations, based on the downgraded projection released last week by the central bank, also trim expected surpluses over the next two years.
The bleaker fiscal outlook has surfaced just as political parties are pitching economic policies to voters ahead of the October election.
In its April budget, the Harper government predicted a string of surpluses, starting with $1.4 billion for this election year. The government forecasted surpluses of $1.7 billion in 2016-17 and $2.6 billion in 2017-18.
But the budget office's number crunching projects Ottawa to produce a $1-billion shortfall in 2015-16 followed by smaller surpluses of $600 million and $2.2 billion over the next two years.
The calculations used fresh projections by the Bank of Canada, which last week lowered its outlook for economic growth in 2015 to 1.1 per cent, down from 1.9 per cent earlier this year.
The budget office also factored in positive offsets that have appeared since the release of the spring budget: lower interest rates and higher gross domestic product inflation. The result uses up the government's $1-billion annual reserve set side for contingencies.
The analysis was produced by the independent office following requests by NDP MP Nathan Cullen and Liberal MP Scott Brison.
Canada's economy has been struggling, leading some to speculate whether it has slipped into recession.
It contracted in the first quarter of the year at an annualized rate of 0.6 per cent -- in large part due to the steep drop in oil prices and the failure of other sectors to pick up the slack.
On Tuesday, Finance Minister Joe Oliver remained optimistic the economy would rebound later in 2015 and insisted the government would live up to its long-held promise to balance the budget in the election year.
"We are very comfortable, very comfortable we're going to achieve a budgetary surplus this year and new numbers will be coming out fairly soon,'' Oliver said.
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The results of the calculations, based on the downgraded projection released last week by the central bank, also trim expected surpluses over the next two years.
The bleaker fiscal outlook has surfaced just as political parties are pitching economic policies to voters ahead of the October election.
In its April budget, the Harper government predicted a string of surpluses, starting with $1.4 billion for this election year. The government forecasted surpluses of $1.7 billion in 2016-17 and $2.6 billion in 2017-18.
But the budget office's number crunching projects Ottawa to produce a $1-billion shortfall in 2015-16 followed by smaller surpluses of $600 million and $2.2 billion over the next two years.
The calculations used fresh projections by the Bank of Canada, which last week lowered its outlook for economic growth in 2015 to 1.1 per cent, down from 1.9 per cent earlier this year.
The budget office also factored in positive offsets that have appeared since the release of the spring budget: lower interest rates and higher gross domestic product inflation. The result uses up the government's $1-billion annual reserve set side for contingencies.
The analysis was produced by the independent office following requests by NDP MP Nathan Cullen and Liberal MP Scott Brison.
Canada's economy has been struggling, leading some to speculate whether it has slipped into recession.
It contracted in the first quarter of the year at an annualized rate of 0.6 per cent -- in large part due to the steep drop in oil prices and the failure of other sectors to pick up the slack.
On Tuesday, Finance Minister Joe Oliver remained optimistic the economy would rebound later in 2015 and insisted the government would live up to its long-held promise to balance the budget in the election year.
"We are very comfortable, very comfortable we're going to achieve a budgetary surplus this year and new numbers will be coming out fairly soon,'' Oliver said.
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