Canada boosts deficit forecasts
- Sees 2020-21 deficit of C$28.1B from $19.7B in March
- Sees 2019-2020 deficit of $26.6B from $19.8B
- Sees 31% deficit-to-GDP in 2019-2020 falling to 29.1% by 2024-25
- Update shows slightly better revenues in 2019 and 2020
Finance Minister Bill Morneau said the rise in the deficit is because of a pension accounting issue. That's not necessarily nefarious. The Federal government and the provinces have been struggling with accounting rules around pensions and obligations.
A personal tax cut was promised in the throne speech and Morneau said it would be the first priority. It should already be priced into CAD.
As an aside, CAD and GBP have been neck-and-neck as the top performers in major FX this year. The pound pulled ahead this week but they remain within 0.8% of each other so it's not over yet.
