OTTAWA — The federal government's books will be balanced by 2015, a full year ahead of schedule, thanks to stronger-than-expected economic growth, the Conference Board of Canada said Thursday.
By comparison, the provinces, notably Ontario, "face a structural fiscal challenge" trying to undo debts run up to stimulate the economy during the recession and as health-care costs continue to rise, the board said.
In its March budget, Ottawa projected a deficit for fiscal 2009-2010 of almost $54 billion as a result of tax revenues diminished by the recession and stimulus spending. It forecast further that it would be 2014-2015 before the budgetary deficit was reduced to $1.8 billion and the next fiscal year before it was eliminated entirely.
"Here's the good news for the federal government," the board said in its report, "a more positive fiscal outcome now appears to be unfolding. The conference board forecasts nominal GDP growth in 2010 to exceed significantly the consensus view used in the federal budget."
"Nominal GDP, which drives government revenues, is now expected to expand by a solid 7.2 per cent in 2010, considerably stronger than budget consensus of 4.9 per cent.
"If spending restraint can be kept on track, the federal government should be able to balance its books a full year earlier than projected," the report adds.
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