OTTAWA – A slipping Canadian economy, highlighted by another downgraded Bank of Canada forecast, could add billions of dollars to the federal deficit, as Finance Minister Bill Morneau is cautioning the government’s Nov. 1 fiscal update will show economic challenges have been greater than expected. Slower-than-expected growth in the United States, a rebalancing of the Chinese economy, and the fallout of the Fort McMurray wildfires are some of the challenges that have affected the Canadian economy, he said. RelatedMorneau, when asked, wouldn’t say if he’ll introduce new spending in the fall economic statement to boost the stubbornly sluggish Canadian economy. For 2017, the bank projects the economy to grow two per cent, down from its previous estimate of 2.2 per cent. The federal budget projected a deficit of $29.4 billion in 2016-17 (based on a $6-billion contingency in case of slower-than-expected growth).

Source: National Post October 21, 2016 03:11 UTC