Canada’s federal fiscal deficit over the next five years will be $16.5 billion more than what the government forecast in its March budget, according to a TD Economics report released on Thursday.

Finance Minister Bill Morneau’s budget projected a deficit of $29.4 billion in the current fiscal year, followed by a $29-billion shortfall the next year and a $22.8-billion deficit in 2018-19.

But a weakened outlook for Canadian economic growth in the medium term will hit the federal government’s coffers, the report said. In the current fiscal year, the federal deficit is expected to hit $34 billion, about $5 billion higher than what Ottawa projected, TD’s economists predicted.

“The economic situation in Canada has deteriorated since budget 2016, impacted not just by wildfires but also by serially disappointing underlying momentum,” TD Economics’ chief economist Beata Caranci wrote in the report.

In an interview with BNN, TD Economics' vice-president and deputy chief economist Derek Burleton said he is concerned that the federal government's deficit will balloon.

"There are pressures on the government to spend more, and I do worry about a persistently high deficit and one that could become extremely high if the economy hit a severe speed bump,” Burleton said.

TD’s warning to Ottawa comes as Morneau met with a group of private-sector economists on Thursday to seek their projections. The government is expected to provide a fall economic and fiscal update in the coming weeks. 

In a press conference in Toronto, Morneau said the global economic environment has become more challenging, citing wildfires in Alberta earlier this year, a growing sense of trade protectionism in the U.S., fallout from the U.K.’s Brexit decision, and “rebalancing” in China. 

The finance minister also said the government remains focused on Canada’s housing market, though it has no imminent plans for additional measures after unveiling expanded mortgage stress tests and the removal of a tax exemption on capital gains for non-residents.

"We announced what we intended to announce in those measures," Morneau told reporters. "We don't have any other measures that we're waiting to announce, but we will remain vigilant in watching the market to ensure that it is stable for the long-term."