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Structural deficits of up to $18.9 billion projected for each of the next five years

The CBC reports that, “Ottawa will face structural budget deficits well into the future even after the Canadian economy returns to normal levels of expansion, suggests a report from the Parliamentary Budget Office. …The PBO is an independent body, mandated to provide independent analysis on the state of the country’s finances, government estimates and trends in the national economy.”

“A structural deficit describes a portion of a country’s budget deficit that exists even when the economy is running at full capacity during a period of expansion. …A structural deficit happens when the shortfall between income and spending becomes systemic and normally requires deliberate action — typically either tax increases or spending cuts — to rectify.”

“The government has thus far insisted that a return to balanced budgets can be achieved without raising taxes or significantly cutting program spending, instead relying on basic economic expansion.”

“(The PBO’s) analysis suggests that the numbers do not, at this point, lead to a balanced budget unless the economy starts performing well above normal historical capacity.”

“The PBO is forecasting structural deficits ranging between $12.5 billion and $18.9 billion for each of the next five fiscal years.”

The article can be read at http://www.cbc.ca/money/story/2010/01/13/structural-deficit-parliamentary-budget-office-report.html.