If recession hits, federal deficit will reach $28 to $34 billion before any stimulus spending

VANCOUVER—Ottawa’s projected deficit of $19.6 billion in 2019/20 may automatically increase to as much as $34.4 billion if Canada enters a recession this year, finds a new study by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank. “By running deficits during a period of economic growth, there is a real risk the country’s finances will deteriorate rapidly when the next recession hits,” said Jason Clemens, executive vice-president of the Fraser Institute and co-author of What Happens to the Federal Deficit if a Recession Occurs in 2019? The current federal government has run deficits every year since 2015, despite continued economic growth, without a projected return to budget balance until 2040.