The 96-page economic and fiscal update includes new commitments, reminders of previously announced measures, and a few progress reports on initiatives that are still in the works.

Here’s a breakdown of some of the most important takeaways.  

  • Canada’s overall projected budget deficit for this fiscal year is now $144.5 billion, compared to the $154.7-billion shortfall predicted in Budget 2021. The deficit is seen steadily dropping to $13.1 billion by the 2026-27 fiscal year. There is no roadmap for a balanced budget over the forecast horizon.
  • The government is forecasting the federal debt-to-GDP ratio will peak this year at 48.0 per cent before falling to an estimated 44.0 per cent in fiscal 2026-27, marking an improvement from the debt-to-GDP ratios projected in this year’s budget, which saw debt-to-gdp peaking at 51.2 per cent this year.
  • Based on forecasts from private sector economists, the government built its fiscal and economic update on an expectation that gross domestic product will rise 4.6 per cent this year, compared to the expectation for 5.8 per cent growth when the budget was tabled in April. Economic output is seen rising 4.2 per cent in 2022 and 2.8 per cent in 2023 – both represent increases from Budget 2021 forecasts.
  • The government is proposing to spend $85 million in the 2022-23 fiscal year to reduce immigration processing times, a move that the feds say is key to ensuring Canada meets its labour and economic targets.
  • $5 billion is being set aside in provisions this fiscal year to support recovery efforts from the British Columbia floods and mudslides. The government said that natural disaster will have a “significant economic impact.”
  • The government’s update includes an assumption of West Texas Intermediate trading at US$68 per barrel this year, compared to the previous assumption of US$60. Next year’s assumed oil price (which is based on forecasts from private sector economists) is US$73 per barrel. In the government’s April budget, it banked on WTI at US$61 next year.  
  • The fiscal update did not contain any new measures directly related to red-hot housing markets. It did however state that a previously announced one-per-cent tax on vacant and underused homes is expected to take effect in 2022. Finance Minister Chrystia Freeland said in her speech Tuesday that additional actions will be announced in the upcoming budget. The lack of new details about the Liberals’ campaign pledge to ban foreign buying of residential properties for two years potentially sets the government on a collision course with Ontario’s government. On Monday, a senior source in the provincial government said Ontario is prepared to hike its tax on non-resident buyers early next year if the federal government doesn’t show progress in implementing its campaign pledge to clamp down on foreign buying activity.