Latest news with #fiscalHealth
National Post
04-07-2025
- Business
- National Post
With deficit projected to soar to $92 billion, 'it is unfair to pass these burdens on,' C.D. Howe Institute says
OTTAWA — The Carney government is poised to post a massive deficit of more than $92 billion during this fiscal year, a new report from a well-respected financial think tank projects, almost double what was forecast just a few months ago by a non-partisan arm of the government. Article content The report, from the C.D. Howe Institute, also forecasts deficits of more than $77 billion a year over the next four years, also huge increases over what had been expected. Article content Article content The think tank attributes much of the government's declining fiscal health to increased spending on defence and other items, the economic effects of the Trump tariffs, cuts to personal income tax and the GST for first-time homebuyers, and the elimination of the digital services tax. Article content Article content Based on the most current and largely optimistic variables, the report says, federal deficits will remain above $71 billion during each of the following three years and in the fiscal year 2028-29 will be greater than three times what the government itself forecast in its most recent federal budget. Article content 'It is widely accepted that Canada's economy is at a critical crossroads,' the C.D. Howe economists write. 'So are Canada's finances – beyond the economic drag of high deficits and rising debt, it is unfair to pass these burdens on to the current young and future generations.' Article content Article content But the most recent federal budget was now well over a year ago. The government took the highly unusual step this year of waiting until the fall to release its annual budget, more than half-way through the fiscal year. Article content The report's authors – William Robson, Don Drummond and Alexandre Laurin – call on Ottawa to improve its accountability by sharing its revenue and spending figures with taxpayers. Article content The gloomy fiscal forecast bolsters the argument that Canadian government spending at the federal, provincial and municipal levels is going from bad to worse. Article content Just four months ago, the Parliamentary Budget Officer projected that the federal deficit would fall to $50.1 billion during this fiscal year, a slight improvement over the $61.9 billion shortfall recorded in 2023-24. The PBO also said at that time that federal deficits would continue to fall in the ensuring years, unless there were new measures to cut revenue or increase spending. Article content The C.D. Howe report criticizes the government's decision to wait until the fiscal year is more than half over before releasing its budget 'Delaying a budget until the fiscal year is more than half over is never good, but Canada's current high-spending trajectory makes this delay especially bad.'
Free Malaysia Today
23-05-2025
- Business
- Free Malaysia Today
Dollar set to snap 4-week winning streak on US fiscal health worries
The dollar was set for a 1.1% decline despite a steep selloff in US Treasuries earlier in the week. (AFP pic) SINGAPORE : The US dollar was soft on Friday, poised to make its first weekly drop in five weeks against the euro and the yen as worries over the US' worsening fiscal health sent investors scurrying for safe havens. After Moody's last week downgraded its US debt ratings, investor attention this week has honed in on the country's US$36 trillion debt pile and US President Donald Trump's tax bill that could add trillions of dollars more to it. Dubbed by Trump as a 'big, beautiful bill', it narrowly passed Republican-controlled US House of Representatives and now heads to the Senate for what is likely to be weeks of debate. The dollar, which compares the US currency against six other units, including the yen and euro, is set for 1.1% decline this week though it was little changed at 99.829 in early Asia trade. That's despite a steep selloff in US Treasuries at the start of the week. The 30-year bond yield stayed above 5% in Asian hours on Friday, hovering near 19 month highs. It is close to October 2023's high of 5.179%, a break past which would take it to its highest since mid-2007. The elevated yield hasn't underpinned the dollar as investors flee US assets in a 'Sell America' move similar to last month. 'What has become quite stark this week is the reaction function in broad markets to the rise in US long-end Treasury yields,' said Chris Weston, head of research at Pepperstone. Weston said higher yields are not being driven by improved growth dynamics, but by concerns of increasing fiscal recklessness, deficit spending and the perception of higher interest expenses. 'Add in the toxic mix of higher inflation expectations … and the net effect has been a strong rise in 'term premium' and the would-be foreign buyers simply staying out of the market.' The euro strengthened 0.21% to US$1.1303 in early trading and is set for a 1.2% gain for the week. The yen was steady at 143.84 per dollar, also on course for a 1.2% rise for the week, after Japan's core inflation accelerated at its fastest annual pace in more than two years in April, raising the odds of another interest rate hike by year-end. The data underscores the quandary facing the Bank of Japan which must grapple with price pressures from persistent food inflation as well as economic headwinds from Trump's tariffs. Super-long Japanese government bonds have also scaled record highs this week, although they were steady on Friday. 'Japan's inflation unsurprisingly was again reported to be firm. This might augment the turbulence in JGBs in the long end,' said Krishna Bhimavarapu, APAC economist at State Street Global Advisor. The Swiss franc was slightly stronger at 0.8272 per dollar, also set for a 1.2% rise for the week after two weeks of losses. Elsewhere, the Australian dollar, often seen as a proxy for risk appetite, is set to end the week and month broadly flat against the greenback. The Aussie last fetched US$0.6422. Australia's central bank on Tuesday cut its cash rate to a two-year low of 3.85%, citing a darker global outlook and cooling inflation at home. New Zealand dollar was 0.2% stronger at US$0.59095, set for a small rise for the week.
Bloomberg
22-05-2025
- Business
- Bloomberg
States Set To Defy US Credit Downgrade
US states from Florida to North Carolina and Texas would likely hold onto top-notch credit scores from Moody's Ratings, mostly because they're in better fiscal shape than the federal government itself. Bloomberg's Amanda Albright has more on the story. (Source: Bloomberg)
