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Present a personal reflection by answering the following question: what idea(s) the readings of the week have inspired you?
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October 13, 2023
Economic and Fiscal Outlook –
October 2023
The Parliamentary Budget Officer (PBO) supports Parliament by providing
economic and financial analysis for the purposes of raising the quality of
parliamentary debate and promoting greater budget transparency and
accountability.
This report provides a baseline projection to help parliamentarians gauge
potential economic and fiscal outcomes under current policy settings.
Contributors:
Nasreddine Ammar, Advisor-Analyst
Lisa Barkova, Analyst
Robert Behrend, Advisor-Analyst
Régine Cléophat, Analyst
Mark Creighton, Analyst
Matt Dong, Analyst
Rolande Kpekou Tossou, Senior Analyst
Marianne Laurin, Analyst
Katarina Michalyshyn, Analyst
Nora Nahornick, Senior Analyst
Jason Stanton, Advisor-Analyst
Kaitlyn Vanderwees, Analyst
Prepared under the direction of:
Kristina Grinshpoon, Acting Director
Chris Matier, Director General
Tim Scholz, Acting Director
Nancy Beauchamp, Marie-Eve Hamel Laberge, Martine Perreault and Rémy
Vanherweghem assisted with the preparation of the report for publication.
For further information, please contact the Office of the Parliamentary
Budget Officer.
Yves Giroux
Parliamentary Budget Officer
Table of Contents
Highlights ………………………………………………………………………………………………………………….. 1
Summary ……………………………………………………………………………………………………………………. 2
Economic outlook ……………………………………………………………………………………………….. 2
Fiscal outlook ……………………………………………………………………………………………………….. 4
Risks and uncertainty………………………………………………………………………………………….. 8
Appendix A: Detailed economic outlook……………………………………………………………. 11
Appendix B: Composition of nominal GDP ……………………………………………………….. 12
Appendix C: Detailed revenue outlook ………………………………………………………………. 13
Appendix D: Detailed expense outlook ……………………………………………………………… 14
Appendix E: Employment Insurance Operating Account ……………………………….. 15
Appendix F: Direct program expenses ……………………………………………………………….. 16
Appendix G: Federal debt outlook ……………………………………………………………………… 17
Appendix H: Comparison to March 2023 outlook ……………………………………………. 18
Apppendix I: Comparison to Budget 2023………………………………………………………….. 19
Notes ……………………………………………………………………………………………………………………….. 20
Economic and Fiscal Outlook – October 2023
Highlights
Following the contraction in real GDP in the second quarter, PBO projects
the Canadian economy to stagnate in the second half of 2023. As the Bank
of Canada maintains its restrictive monetary policy to restore price stability,
we project that consumer spending will remain weak in the second half of
this year and the first half of 2024.
PBO expects the Bank of Canada to hold the policy interest rate at 5 per
cent through the first quarter of 2024. With CPI inflation on track to return
to its 2 per cent target, we then expect the Bank to start lowering its policy
rate in April 2024.
For the current fiscal year, 2023-24, PBO projects the budgetary deficit to
rise to $46.5 billion (1.6 per cent of GDP). Assuming no new measures are
introduced, and existing temporary measures sunset as scheduled, the
budgetary deficit is projected to resume its downward trajectory, falling to
$8.2 billion (0.2 per cent of GDP) in 2028-29.
PBO projects the federal debt-to-GDP ratio to rise to 42.6 per cent in
2023-24. Assuming no new measures and existing temporary measures
sunset as scheduled, the federal debt ratio is projected to fall to 37.8 per
cent in 2028-29 but remain above its pre-pandemic level of 31.2 per cent of
GDP in 2019-20.
PBO projects the debt service ratio (that is, public debt charges relative to
tax revenues) under status quo policy will peak at 12.0 per cent in 2023-24
and then decline gradually to 11.0 per cent in 2028-29—well above its prepandemic low of 8.3 per cent in 2018-19.
1
Economic and Fiscal Outlook – October 2023
Summary
This report provides a baseline projection to help parliamentarians gauge
potential economic and fiscal outcomes under current policy settings. Our
outlook incorporates economic data up to and including September 30.1 It
also includes new measures announced by the Government in Budget 2023
and through September 15. The following provides a condensed overview
of PBO’s Economic and Fiscal Outlook (EFO). Projection details are provided
in Appendices A to I. An accessible version of the appendices is available on
the PBO website.
Economic outlook
Following the contraction in real GDP in the second quarter, we project the
Canadian economy to stagnate in the second half of 2023 with quarterly
real GDP growth averaging 0.1 per cent.
As the Bank of Canada maintains its restrictive monetary policy to restore
price stability, we project that consumer spending will remain weak in the
second half of this year and the first half of 2024. We project weakness in
residential investment to persist through the end of next year. Inventory
investment also remains a drag on growth as firms reduce their stock levels.
We project annual real GDP growth in 2025 to rebound to 2.4 per cent, as
consumer spending and residential investment recover and the drag from
inventory investment reverses (Table 1). Over 2026 to 2028, we project real
GDP growth to average 2.1 per cent which is higher than our estimated
growth in potential output (1.9 per cent) over the same period.
2
Economic and Fiscal Outlook – October 2023
Table 1
Summary of the economic outlook, per cent (unless otherwise
stated)
2022
2023
2024
2025 2026-2028
Real GDP growth
3.4
1.2
0.7
2.4
2.1
Unemployment rate
5.1
5.8
6.0
5.8
5.6
WTI oil price, $US
95
82
83
77
80
CPI inflation
6.8
4.0
2.8
1.9
1.9
Bank of Canada
policy rate
4.25
5.00
3.50
2.50
2.50
Source:
Statistics Canada and Office of the Parliamentary Budget Officer.
Note:
The projection period covers 2023 to 2028. The unemployment rate and the Bank of
Canada policy rate are end of period values.
Despite a decline in the labour force participation rate, the unemployment
rate has increased from 5.0 per cent in April to 5.5 per cent in August as
moderate employment gains have fallen well short of robust population
growth.
As the economy stagnates, we project the unemployment rate to rise to
5.8 per cent by the end of this year. With economic weakness persisting
into next year, we project the unemployment rate to reach 6.0 per cent in
mid-2024 and remain elevated through the first half of 2025 before
gradually declining to 5.6 per cent by the end of the projection horizon.
Upward pressure from commodity prices and strong underlying inflation
are projected to keep consumer price inflation2 above the 3 per cent upper
bound of the control range through the second quarter of 2024.
3
Economic and Fiscal Outlook – October 2023
As the economy enters into material excess supply and commodity prices
weaken, we project inflation to return to its 2 per cent target by the end of
2024 and then to average 1.9 per cent over 2025 to 2027 as the economy
gradually returns to its potential output, or productive capacity.
We expect the Bank of Canada to hold the policy interest rate at 5 per cent
through the first quarter of 2024. With CPI inflation on track to return to its
2 per cent target, we then expect the Bank to start lowering its policy rate in
April 2024. We assume that the policy rate will be reduced by 25 basis
points at each fixed announcement date, returning the rate to its estimated
neutral level of 2.5 per cent in the second quarter of 2025.
Overall, the outlook for nominal GDP—the broadest measure of the
government’s tax base—is lower compared to our March 2023 projection
due to lower-than-expected GDP inflation in the fourth quarter of 2022 and
weaker projected real GDP growth in 2024 owing to tighter-than-expected
monetary policy. The level of nominal GDP is projected to be $22.7 billion
lower annually, on average, over 2023 to 2027 compared to our March
2023 outlook.
Fiscal outlook
Our status quo outlook includes new measures announced in Budget 2023
and through September 15. Of note, these measures include the production
subsidy provided to Stellantis-LG Energy Solutions and Volkswagen, and
the Enhanced GST Rental Rebate. Combined, new measures amount to
$28.6 billion in (net) new spending over 2022-23 to 2027-28.3
In the absence of final financial results for the past fiscal year, we estimate
that there was a budgetary deficit of $38.7 billion (1.4 per cent of GDP) in
2022-23.4 For the current fiscal year, 2023-24, we project the deficit to rise
to $46.5 billion (1.6 per cent of GDP) due to slower revenue growth and
higher expenses (Table 2).
4
Economic and Fiscal Outlook – October 2023
In 2024-25, assuming no new measure are introduced, and existing
temporary measures sunset as scheduled, the budgetary deficit is projected
to resume its downward trajectory, reaching $8.2 billion (0.2 per cent of
GDP) in 2028-29, as growth in tax revenue tracks gains in nominal GDP and
growth in program spending remains relatively constrained.
Table 2
Summary of the fiscal outlook, billions of dollars (unless otherwise
stated)
2022- 2023- 2024- 2025- 2026- 2027- 20282023 2024 2025 2026 2027 2028 2029
Revenues
442.6
458.4
481.6
498.8
520.7
541.1
563.4
Program expenses
436.7
451.7
464.5
474.8
487.4
504.4
522.9
Public debt charges
34.8
46.4
47.0
47.4
49.6
50.4
51.1
Actuarial losses
9.8
6.9
3.3
1.5
-1.2
0.4
-2.4
Expenses
481.3
505.0
514.9
523.7
535.8
555.2
571.6
Budgetary balance
-38.7
-46.5
-33.2
-24.9
-15.1
-14.1
-8.2
Federal debt 1,168.8 1,215.3 1,248.6 1,273.5 1,288.6 1,302.7 1,310.9
Budgetary balance, % of GDP
-1.4
-1.6
-1.1
-0.8
-0.5
-0.4
-0.2
Federal debt, % of GDP
42.0
42.6
42.3
41.4
40.2
39.1
37.8
Source:
Office of the Parliamentary Budget Officer.
Note:
Expenses include actuarial losses. As of 2022-23, the Government adopted new Public
Sector Accounting Board (PSAB) standards for both asset retirement obligations and
financial instruments. These changes impact the opening balance of the accumulated
deficit for 2022-23 and not the budgetary balance. Fiscal year 2022-23 is an estimate.
The projection period covers fiscal years 2023-24 to 2028-29. Totals may not add up
due to rounding.
With the increase in interest rates, we project that the debt service ratio
(that is, public debt charges relative to tax revenues) will peak at 12.0 per
cent in 2023-24 (Figure 1). The debt service ratio is then projected to
gradually decline, as growth in public debt charges moderates and interest
5
Economic and Fiscal Outlook – October 2023
rates return to their neutral levels, reaching 11.0 in 2028-29—well above its
pre-pandemic low of 8.3 per cent in 2018-19.
In 2023-24, due to slower nominal GDP growth and the increase in the
budgetary deficit, we expect the federal debt-to-GDP ratio to increase to
42.6 per cent before gradually declining to 37.8 per cent by 2028-29,
remaining above its pre-pandemic level of 31.2 per cent of GDP in 2019-20.
The federal debt-to-GDP ratio is projected to be 0.7 percentage points
higher, on average, over 2023-24 to 2027-28 compared to our March
outlook.
Figure 1
Federal debt and debt service ratios, per cent
50
45
40
35
Debt-to-GDP, % (left axis)
50
Debt service ratio, % of tax revenues
(right axis)
40
45
35
30
30
25
25
20
20
15
15
10
10
5
5
0
0
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
Textual description:
Data for this figure are available in tab “Figure 1” of the accessibility file.
Source:
Finance Canada, Statistics Canada and Office of the Parliamentary Budget Officer.
Note:
Data are in fiscal years (2021 corresponds to fiscal year 2021-22). Fiscal year 2022-23 is
an estimate. The projection period covers fiscal years 2023-24 to 2028-29.
6
Economic and Fiscal Outlook – October 2023
Compared to our March outlook, we are projecting budgetary deficits that
are $4.0 billion higher, on average, over 2022-23 to 2027-28. This upward
revision is due to new measures and the weaker economic outlook, along
with higher interest rates impacting public debt charges, which are partially
offset by lower-than-anticipated program expenses (Table 3).
Table 3
Evolution of the budgetary balance since March 2023, billions of
dollars
20222023
20232024
20242025
20252026
20262027
20272028
Budgetary balance –
March 2023 EFO
-36.5
-43.1
-27.5
-20.8
-12.1
-8.7
Additional measures
-11.0
-5.5
-1.5
-6.4
-1.3
-2.9
Economic and other fiscal
developments
8.8
2.1
-4.3
2.2
-1.7
-2.5
Budgetary balance –
October 2023 EFO
-38.7
-46.5
-33.2
-24.9
-15.1
-14.1
Source:
Office of the Parliamentary Budget Officer.
Note:
Additional measures include those announced in Budget 2023 and through to
September 15. Fiscal year 2022-23 is an estimate. The projection period covers fiscal
years 2023-24 to 2028-29. Totals may not add up due to rounding.
Excluding Budget 2023 and off-cycle measures, our revenue outlook is
largely unchanged. While lower personal incomes and consumer spending
put downward pressure on revenues, higher corporate income tax and
other revenues offset this weakness over the projection horizon.5
Excluding new measures, expenses were, on average, revised down by
$0.9 billion largely due to lower-than-anticipated operating expenses and
major transfers to persons. However, this revision was somewhat offset by
the impact of higher interest rates on public debt charges.6
7
Economic and Fiscal Outlook – October 2023
Risks and uncertainty
Our outlook provides a baseline projection to help parliamentarians gauge
potential economic and fiscal outcomes under current policy settings (that
is, a “status quo” baseline). We judge that the risks to our baseline
economic and fiscal projection are roughly balanced.
In terms of downside risks, we judge that the most important risk is a
larger-than-expected impact of the Bank of Canada’s restrictive monetary
policy (particularly on households and the housing market), which would
negatively affect the Canadian economy and federal finances.
In terms of upside risks, we judge that the most important risk is higherthan-projected spending by provincial-territorial governments. Our
projection of government spending is informed by recent budgets and
updates that reflect restrained program expenditure growth. Higher-thanprojected government spending could boost economic activity.
To illustrate uncertainty surrounding our economic and fiscal outlook, we
construct distributions of possible future outcomes that are centred on our
baseline projection, which are then used to calculate “confidence” intervals.7
Relative to our baseline real GDP growth projection (1.8 per cent annually,
on average, over 2023 to 2028), the 30, 50 and 70 per cent confidence
intervals shown in Figure 2 are consistent with average annual growth of
±0.2, ±0.4 and ±0.6 percentage points respectively. The lower bound of the
70 per cent confidence interval in 2024 is consistent with a 0.9 per cent
decline in real GDP from its 2023 baseline level.
8
Economic and Fiscal Outlook – October 2023
Figure 2
Uncertainty surrounding the outlook for real GDP, billions chained
(2012) dollars
2 600
30 per cent confidence
2 500
50 per cent confidence
70 per cent confidence
2 400
Real GDP
2 300
2 200
2 100
2 000
1 900
2017
2019
2021
2023
2025
2027
Textual description:
Data for this figure are available in tab “Figure 2” of the accessibility file.
Source:
Statistics Canada and Office of the Parliamentary Budget Officer.
Note:
The series are presented on a calendar-year basis. The projection period covers 2023 to
2028.
Given the possible economic outcomes surrounding our baseline
projection, and on a status quo basis, we estimate that a 70 per cent
confidence interval for the federal debt-to-GDP ratio in 2028-29 would
range from 33.0 per cent to 43.2 per cent (Figure 3). We estimate there is a
79 per cent chance that the federal debt-to-GDP ratio in 2028-29 would be
below its 2022-23 baseline level of 42.0 per cent.
9
Economic and Fiscal Outlook – October 2023
Figure 3
Uncertainty surrounding the outlook for the federal debt-to-GDP
ratio, per cent
55
30 per cent confidence
50 per cent confidence
50
70 per cent confidence
Federal debt-to-GDP ratio
45
40
35
30
25
2017
2019
2021
2023
2025
2027
Textual description:
Data for this figure are available in tab “Figure 3” of the accessibility file.
Source:
Finance Canada, Statistics Canada and Office of the Parliamentary Budget Officer.
Note:
The series are presented on a fiscal-year basis (2023 corresponds to fiscal year 2023-24).
Fiscal year 2022-23 is an estimate. The projection period covers 2023-24 to 2028-29. The
red line corresponds to the baseline level of the federal debt-to-GDP ratio in 2022-23.
On a status quo basis, we estimate that a 70 per cent confidence interval
for the budgetary balance in 2028-29 would range from a deficit of
$38.2 billion to a surplus of $21.5 billion, with a 38 per cent chance of a
balanced budget or better.
10
Economic and Fiscal Outlook – October 2023
Appendix A:
Detailed economic outlook
Projection
% unless otherwise indicated
2022
2023
2024
2025
2026
2027
2028
October 2023
3.4
1.2
0.7
2.4
2.3
2.1
1.9
March 2023
3.6
1.0
1.6
2.2
2.1
2.0
October 2023
1.3
2.2
2.2
1.9
1.9
1.9
March 2023
1.5
1.8
1.8
1.9
1.9
1.9
October 2023
7.2
1.3
2.9
1.5
1.9
1.9
March 2023
7.5
1.5
2.1
1.8
2.1
2.1
October 2023
10.9
2.5
3.6
4.0
4.2
4.1
March 2023
11.4
2.6
3.8
4.0
4.2
4.2
October 2023
2,783
2,852
2,954
3,073
3,203
3,333
March 2023
2,796
2,867
2,976
3,096
3,227
3,362
October 2023
2.4
4.8
4.2
2.6
2.5
2.5
March 2023
2.4
4.4
3.2
2.5
2.5
2.5
October 2023
2.8
3.4
3.4
3.3
3.3
3.3
March 2023
2.8
3.4
3.3
3.3
3.3
3.3
October 2023
76.9
74.6
76.4
77.7
79.1
79.9
March 2023
76.9
76.7
79.2
79.9
80.5
80.8
October 2023
5.3
5.4
5.9
5.9
5.7
5.6
March 2023
5.3
5.5
5.9
5.7
5.6
5.5
October 2023
6.8
4.0
2.8
1.9
1.9
1.9
March 2023
6.8
3.7
2.3
2.0
2.0
2.0
October 2023
2.1
2.2
1.1
1.7
1.8
1.8
March 2023
2.1
0.7
1.3
2
1.8
1.8
October 2023
95
82
83
77
78
80
March 2023
95
78
73
72
74
75
Real GDP growth
Potential GDP growth
1.9
GDP inflation
1.9
Nominal GDP growth
3.9
Nominal GDP ($ billions)
3,465
3-month treasury rate
2.5
10-year government bond rate
3.3
Exchange rate (US¢/C$)
80.3
Unemployment rate
5.6
CPI inflation
1.9
U.S. real GDP growth
1.8
WTI oil price ($US)
Source:
82
Statistics Canada and Office of the Parliamentary Budget Officer.
11
Economic and Fiscal Outlook – October 2023
Appendix B:
Composition of nominal GDP
Projection
% of GDP
2022
2023
2024
2025
2026
2027
2028
Final household consumption
52.8
54.6
54.7
55.0
55.3
55.6
55.9
Non-profit institutions serving households
1.6
1.6
1.7
1.7
1.7
1.8
1.8
Government consumption expenditure
21.0
21.3
21.0
20.8
20.5
20.2
20.0
Government investment
3.8
3.9
3.9
3.8
3.8
3.7
3.7
Residential investment
8.6
7.5
7.2
7.0
7.2
7.3
7.6
Expenditure share
Business investment
10.6
11.1
11.3
11.3
11.5
11.5
11.6
Inventory investment
1.4
0.1
-0.3
0.1
0.5
0.5
0.3
Exports of goods and services
33.8
33.4
33.4
32.7
32.4
32.2
32.1
Imports of goods and services
33.6
33.6
32.9
32.4
32.7
32.8
33.0
Compensation of employees
49.9
51.8
51.3
50.9
51.0
51.2
51.2
Net mixed income
8.5
9.0
8.9
8.8
8.8
8.9
8.9
Corporate profits before tax
12.4
9.9
9.7
10.1
9.9
9.5
9.4
Investment income
2.9
1.8
2.5
2.6
2.6
2.6
2.6
Income share
Source:
Consumption of fixed capital
16.3
16.8
16.6
16.4
16.5
16.5
16.4
Taxes less subsidies on production
3.9
4.1
4.1
4.1
4.1
4.1
4.0
Taxes less subsidies on products and imports
6.2
6.6
6.9
7.1
7.2
7.3
7.4
Statistics Canada and Office of the Parliamentary Budget Officer.
12
Economic and Fiscal Outlook – October 2023
Appendix C:
Detailed revenue outlook
Estimate
$ billions
Projection
20222023-
20232024-
20242025-
20252026-
20262027-
20272028-
20282029-
Personal income tax
205.4
215.8
226.8
237.5
248.9
260.8
272.0
Corporate income tax
90.4
82.5
84.1
85.7
85.7
88.0
91.4
Non-resident income tax
13.4
13.5
13.3
13.3
13.8
14.3
14.7
Total income tax
309.2
311.8
324.2
336.5
348.4
363.1
378.1
Goods and Services Tax
47.1
51.8
53.1
54.7
56.7
58.9
61.1
Custom import duties
6.0
6.8
7.2
7.4
7.8
8.1
8.5
Other excise taxes/duties
12.2
12.7
13.1
13.4
13.6
13.8
14.0
Total excise taxes/duties
65.3
71.3
73.3
75.5
78.1
80.8
83.6
Other taxes
0.2
2.6
1.4
1.3
4.1
3.7
3.7
Fuel charge proceeds
7.9
10.7
13.1
14.9
16.7
18.1
19.6
EI premium revenues
26.7
29.1
30.3
30.3
31.1
32.3
33.5
Enterprise Crown corporations
7.8
3.7
8.0
10.8
12.4
12.4
13.0
Other programs
23.0
25.7
27.9
26.4
26.7
27.2
28.1
Income taxes
Excise taxes/duties
Other revenues
Net foreign exchange
2.6
3.6
3.4
3.0
3.2
3.5
3.9
Total other revenues
33.3
33.0
39.3
40.2
42.4
43.1
44.9
Total budgetary revenues
442.6
458.4
481.6
498.8
520.7
541.1
563.4
13.5
13.5
13.5
13.5
13.4
13.4
13.4
0.3
0.4
0.4
0.5
0.5
0.5
0.6
1.0
1.0
1.0
1.0
1.0
1.0
1.0
Other revenues
1.2
1.2
1.3
1.3
1.3
1.3
1.3
Total budgetary revenues
15.9
16.1
16.3
16.2
16.3
16.2
16.3
Per cent of GDP
Total tax revenues
Proceeds from the pollution pricing
framework
Employment Insurance premium
revenues
Source:
Finance Canada and Office of the Parliamentary Budget Officer.
Note:
Totals may not add due to rounding.
13
Economic and Fiscal Outlook – October 2023
Appendix D:
Detailed expense outlook
Estimate
20222023-
20232024-
20242025-
Elderly benefits
69.3
76.2
81.1
85.4
Employment Insurance
21.8
23.3
25.5
COVID-19 income support for workers
-3.0
-2.6
0.0
$ billions
Projection
2025202620262027-
20272028-
20282029-
89.7
94.2
98.7
25.7
26.2
26.9
27.7
0.0
0.0
0.0
0.0
Major transfers to persons
Children’s benefits
24.5
26.2
27.3
28.3
29.1
29.6
30.2
Total
Major transfers to other levels of
government
Canada Health Transfer
112.6
123.1
134.0
139.4
144.9
150.7
156.6
47.1
49.4
52.2
54.8
57.6
60.4
62.9
Canada Social Transfer
15.9
16.4
16.9
17.4
17.9
18.5
19.0
Equalization
21.9
24.0
25.3
26.2
27.2
28.3
29.5
Territorial Formula Financing
Health agreements with provinces and
territories
Canada-wide early learning and
childcare
Canada Community-Building Fund
4.6
4.8
5.1
5.4
5.6
5.9
6.1
1.2
3.7
3.7
3.7
3.7
2.5
2.5
4.5
5.6
6.6
7.9
7.9
7.7
7.7
2.3
2.4
2.4
2.5
2.5
2.6
2.6
Other transfers to government
-6.4
-6.9
-7.3
-7.6
-8.0
-8.5
-8.9
Total
91.1
99.4
105.0
110.3
114.4
117.4
121.5
Fuel charge proceeds returned
6.6
11.9
14.4
14.9
16.8
18.1
19.6
Transfer payments
94.4
90.3
88.4
90.2
90.1
93.2
95.8
Operating and capital expenses
132.0
127.0
122.7
120.1
121.2
124.9
129.5
Total direct program expenses
226.3
217.2
211.1
210.3
211.2
218.1
225.3
Total program expenses
436.7
451.7
464.5
474.8
487.4
504.4
522.9
Public debt charges
Total expenses, excluding net actuarial
losses
Net actuarial losses
34.8
46.4
47.0
47.4
49.6
50.4
51.1
471.5
498.1
511.5
522.2
537.0
554.8
574.0
9.8
6.9
3.3
1.5
-1.2
0.4
-2.4
Major transfers to persons
Major transfers to other levels of
government
Fuel charge proceeds returned
4.0
4.3
4.5
4.5
4.5
4.5
4.5
3.3
3.5
3.6
3.6
3.6
3.5
3.5
0.2
0.4
0.5
0.5
0.5
0.5
0.6
Direct program expenses
8.1
7.6
7.1
6.8
6.6
6.5
6.5
Total program expenses
15.7
15.8
15.7
15.5
15.2
15.1
15.1
Direct program expenses
Per cent of GDP
Source:
Finance Canada and Office of the Parliamentary Budget Officer.
Note:
Totals may not add due to rounding.
14
Economic and Fiscal Outlook – October 2023
Appendix E:
Employment Insurance Operating
Account
Estimate
Projection
20222023-
20232024-
20242025-
20252026-
20262027-
20272028-
20282029-
Premium revenues
26.7
29.1
30.3
30.3
31.1
32.3
33.5
Contributions for federal
employees
0.4
0.4
0.4
0.4
0.4
0.4
0.4
Total revenues
27.2
29.5
30.7
30.7
31.5
32.7
33.9
Benefits
21.8
23.3
25.5
25.7
26.2
26.9
27.7
Administration expenses
2.7
2.8
2.9
2.9
3.0
3.1
3.2
Total expenses
24.5
26.1
28.4
28.6
29.2
30.1
30.9
2022
2023
2024
2025
2026
(…)
2030
2031
Annual balance
1.2
2.8
2.7
2.0
2.2
3.3
3.6
Cumulative balance
-24.7
-21.9
-19.2
-17.2
-15.0
-3.2
0.4
Premium rate
(per $100 of insurable earnings)
1.58
1.63
1.66
1.61
1.58
1.58
1.58
$ billions
Revenues
Expenses
Source:
Finance Canada and Office of the Parliamentary Budget Officer.
Note:
Totals may not add due to rounding. The projection period covers 2023 to 2031.
15
Economic and Fiscal Outlook – October 2023
Appendix F:
Direct program expenses
Estimate
20222023-
20232024-
20242025-
Canada Emergency Wage Subsidy
-0.2
0.0
0.0
0.0
Other payments
94.6
90.3
88.4
Total other transfer payments
94.4
90.3
88.4
Personnel expenses
66.4
64.6
Consolidated Crown corporations
9.3
9.2
$ billions
Projection
2025202620262027-
20272028-
20282029-
0.0
0.0
0.0
90.2
90.1
93.2
95.8
90.2
90.1
93.2
95.8
63.9
63.0
64.5
66.5
68.9
9.5
9.4
9.4
9.8
10.2
Other transfer payments
Operating expenses
Other operating expenses
50.1
46.4
41.9
39.7
38.9
39.3
40.7
Total operating expenses
125.8
120.3
115.4
112.2
112.8
115.6
119.8
Capital amortization expenses
6.2
6.7
7.3
7.9
8.4
9.3
9.7
Operating and capital expenses
132.0
127.0
122.7
120.1
121.2
124.9
129.5
Total direct program expenses
226.3
217.2
211.1
210.3
211.2
218.1
225.3
Source:
Finance Canada and Office of the Parliamentary Budget Officer.
Note:
Totals may not add due to rounding.
16
Economic and Fiscal Outlook – October 2023
Appendix G:
Federal debt outlook
Estimate
$billions unless otherwise indicated
Projection
20222023-
20232024-
20242025-
20252026-
20262027-
20272028-
20282029-
Market debt*
1,256.2
1,302.7
1,335.9
1,360.9
1,375.9
1,390.1
1,398.3
Pensions and other future benefits
319.5
313.6
310.2
308.6
310.9
318.0
329.5
Other liabilities
10.8
11.2
11.4
11.7
11.8
11.9
12.0
Interest-bearing debt
Total interest-bearing debt
1,586.4
1,627.4
1,657.6
1,681.2
1,698.6
1,719.9
1,739.8
Accounts payable and accrued
liabilities
242.2
247.2
253.3
261.9
273.7
287.4
302.5
Total liabilities
1,828.7
1,874.6
1,910.8
1,943.1
1,972.3
2,007.3
2,042.3
Financial assets
552.3
547.9
547.0
550.2
560.1
576.6
598.8
Non-financial assets
107.6
111.4
115.3
119.4
123.6
128.0
132.5
Total assets
659.9
659.3
662.3
669.6
683.7
704.6
731.3
Federal debt (liabilities less assets)
1,168.8
1,215.3
1,248.6
1,273.5
1,288.6
1,302.7
1,310.9
Federal debt (% of GDP)
42.0
42.6
42.3
41.4
40.2
39.1
37.8
Market debt: agent Crown
corporations*
311.6
317.3
318.2
327.9
333.3
338.3
343.4
Borrowing requirements, as per the
Borrowing Authority Act
1,567.7
1,620.0
1,654.1
1,688.8
1,709.3
1,728.3
1,741.7
Source:
Finance Canada and Office of the Parliamentary Budget Officer.
Note:
* Borrowing requirements under the Borrowing Authority Act pertain to the sum of Government of Canada and agent
Crown corporation market debt. Totals may not add due to rounding.
17
Economic and Fiscal Outlook – October 2023
Appendix H:
Comparison to March 2023 outlook
$ billions
Income taxes
Personal income tax
Corporate income tax
Non-resident income tax
Total income tax
Excise taxes/duties
Goods and Services Tax
Custom import duties
Other excise taxes/duties
Total excise taxes/duties
Other taxes
Fuel charge proceeds
EI premium revenues
Other revenues
Total budgetary revenues
Major transfers to persons
Elderly benefits
Employment Insurance
COVID-19 income support for workers
Children’s benefits
Total
Major transfers to other levels of government
Canada Health Transfer
Canada Social Transfer
Equalization
Territorial Formula Financing
Other transfers to government
Total
Fuel charge proceeds returned
Direct program expenses
Other transfer payments
Operating and capital expenses
Total direct program expenses
Total program expenses
Public debt charges
Total expenses
Budgetary balance before net actuarial losses
Net actuarial losses
Budgetary balance
Federal debt
Estimate
20222023-
20232024-
20242025-
Projection
20252026-
20262027-
20272028-
-4.8
2.3
-0.5
-3.0
-1.5
4.4
0.1
3.0
-1.0
3.8
0.1
2.9
-1.9
4.5
-0.2
2.4
-2.3
3.0
-0.2
0.6
-2.4
2.6
-0.2
0.1
-1.3
-0.3
0.0
-1.6
0.0
-0.6
0.0
1.2
-4.1
0.4
0.1
0.0
0.5
2.2
-0.8
0.5
-0.2
5.2
0.2
0.2
0.3
0.7
-0.2
-0.9
0.5
2.2
5.2
-0.2
0.0
0.4
0.2
-0.3
-1.2
-0.5
2.9
3.5
-0.5
0.0
0.4
0.0
2.2
-1.4
-1.1
3.4
3.6
-0.7
0.1
0.6
-0.1
1.6
-1.8
-1.0
3.1
1.9
-0.6
-0.4
-3.2
-0.5
-4.7
0.0
-0.5
-2.6
-0.4
-3.5
0.5
0.4
0.0
-0.7
0.2
0.5
0.0
0.0
-0.5
0.0
0.4
-0.3
0.0
-0.2
-0.1
0.3
-0.3
0.0
-0.1
-0.1
-0.1
0.0
0.0
0.0
-0.1
-0.1
-1.8
0.0
0.0
0.0
0.0
-0.6
-0.6
-1.2
-0.1
0.0
-0.1
0.0
-0.6
-0.8
0.2
-0.1
0.0
-0.1
0.0
-0.6
-0.8
-1.3
-0.1
0.0
-0.1
0.0
-0.6
-0.8
-1.3
-0.2
0.0
-0.1
0.0
-0.6
-0.9
-1.8
1.1
3.4
4.5
-2.0
0.1
-1.9
-2.2
0.0
-2.2
0.6
6.6
3.2
9.8
4.6
2.8
7.4
-2.2
1.2
-3.4
4.0
6.0
1.7
7.7
7.4
3.3
10.7
-5.5
0.3
-5.8
9.8
7.6
-0.5
7.1
5.0
2.7
7.6
-4.1
0.0
-4.1
13.9
7.6
-1.8
5.8
3.5
3.9
7.5
-3.8
-0.8
-3.0
16.9
8.3
-1.8
6.5
3.7
4.5
8.1
-6.3
-0.8
-5.4
22.3
Source:
Finance Canada and Office of the Parliamentary Budget Officer.
Note:
Totals may not add due to rounding.
18
Economic and Fiscal Outlook – October 2023
Appendix I:
$ billions
Comparison to Budget 2023
Estimate
20222023-
20232024-
-1.4
2.4
-0.2
0.9
Income taxes
Personal income tax
Corporate income tax
Non-resident income tax
Total income tax
Excise taxes/duties
Goods and Services Tax
Custom import duties
Other excise taxes/duties
Total excise taxes/duties
Other taxes
Fuel charge proceeds
EI premium revenues
Other revenues
Total budgetary revenues
Major transfers to persons
Elderly benefits
Employment Insurance
COVID-19 income support for workers
Children’s benefits
Total
Major transfers to other levels of government
Canada Health Transfer
Canada Social Transfer
Equalization
Territorial Formula Financing
Other transfers to government
Total
Fuel charge proceeds returned
Direct program expenses
Other transfer payments
Operating and capital expenses
Total direct program expenses
Total program expenses
Public debt charges
Total expenses
Budgetary balance before net actuarial losses
Net actuarial losses
Budgetary balance
Federal debt
20242025-
Projection
20252026-
20262027-
20272028-
2.1
-3.0
-0.2
-1.1
2.3
-2.2
0.2
0.3
1.8
-2.1
0.6
0.2
2.4
-4.4
0.8
-1.2
2.9
-5.1
0.7
-1.5
1.7
-0.2
0.8
2.3
0.0
0.2
-0.1
2.0
5.3
0.4
0.3
0.8
1.4
1.7
0.6
0.9
-1.7
1.6
-0.4
0.3
0.7
0.5
0.5
0.8
1.3
-0.4
3.1
-0.8
0.3
0.9
0.4
0.3
0.9
0.4
-1.9
0.4
-0.7
0.4
1.0
0.7
0.3
1.0
0.1
-1.9
-1.1
-0.5
0.4
1.1
1.0
0.3
1.0
0.2
-2.7
-1.7
0.2
-0.8
0.0
0.0
-0.7
0.3
-0.9
-2.6
0.6
-2.6
-0.1
0.0
0.0
-0.1
-0.1
-0.9
-0.5
0.0
-0.2
-1.7
-1.7
-0.4
0.0
-0.2
-2.4
-2.1
-0.4
0.0
-0.4
-2.9
0.0
0.0
0.0
0.0
0.1
0.1
-0.3
0.0
0.0
0.0
0.0
-0.1
-0.1
0.7
0.2
0.0
0.1
0.0
-0.1
0.3
0.9
0.2
0.0
0.3
0.1
-0.1
0.5
0.9
0.3
0.0
0.2
0.2
-0.2
0.5
1.0
0.2
0.0
0.2
0.2
-0.3
0.4
1.0
1.0
0.6
1.5
0.8
0.3
1.1
4.3
0.0
4.3
-11.9
3.9
3.3
7.0
5.1
2.5
7.6
-6.0
0.5
-6.4
-5.5
-2.4
2.5
0.1
1.2
1.0
2.2
0.9
-0.9
1.8
-7.2
-0.9
0.2
-0.7
-1.1
0.8
-0.3
0.7
-1.3
1.9
-9.2
-1.1
0.1
-1.1
-1.8
1.3
-0.6
-0.5
-1.2
0.7
-9.8
-0.8
1.2
0.4
-1.0
0.1
-0.9
-0.8
-0.7
-0.1
-9.8
Source:
Finance Canada and Office of the Parliamentary Budget Officer.
Note:
Totals may not add due to rounding.
19
Economic and Fiscal Outlook – October 2023
Notes
1
Our projection does not include the third estimate of GDP or the
comprehensive update of the United States National Economic Accounts
published by the Bureau of Economic Analysis on September 28.
2
As measured by year-over-year changes in the Consumer Price Index
(CPI).
3
These amounts include PBO cost estimates of measures detailed in
Budget 2023. These measures are $3.6 billion lower than the Government’s
estimates, largely due to differences in costing of the new Canadian Dental
Care Plan.
4
As the 2023 Public Accounts have not yet been published, the estimate for
2022-23 relies on data from Finance Canada’s March 2023 Fiscal Monitor
along with PBO assumptions and estimates.
On average, over the past decade, the Public Accounts were tabled seven
months after the close of the fiscal year. As noted in our previous reports,
the Government continues to fall short of the standard for advanced
practice in the International Monetary Fund’s financial reporting guidelines,
which recommends that governments publish their annual financial
statements within six months of the close of the fiscal year.
5
The upward revision to our outlook for tax revenues largely reflects
stronger-than-expected corporate profits in 2022-23 and their continued
strength in most sectors into the second quarter of 20
