![]() ![]() To date Canada has provided $90-million in military aid, including weapons such as machine guns and anti-tank rockets, as well as non-lethal items such as flak vests. The budget also calls for Canada to ramp up its support for Ukraine. Even with the increase in annual defence spending, which is projected to rise to about $41-billion in fiscal 2026-27, Canada will still fall short of the NATO target of 2 per cent of GDP. While announcing a review of Canada’s defence policy, the budget promises $6.1-billion over five years in direct new spending by the Defence Department to increase the capabilities of the Canadian Armed Forces, with an additional $1.4-billion in annual spending after that. The budget signals that Canada is stepping up, though many will argue it’s still not doing enough. ![]() ![]() Russia’s invasion of Ukraine has spurred many Western countries to overhaul their defence spending. Over the next five years, the federal debt-to-GDP ratio is projected to fall five percentage points, to 41.5 per cent. The government said it “remains committed” to its fiscal anchor of reducing federal debt relative to gross domestic product. Against that rosier backdrop, the government committed to more than $56-billion in new spending Thursday, partly offset by new taxes. All told, Ottawa is sitting on a revenue windfall of roughly $85-billion over six years, relative to projections in late 2021. But the situation is delivering a cash infusion to governments, helping their bottom lines. For the 2022-23 fiscal year, the deficit will ebb to $52.8-billion (versus December’s $58.4-billion), eventually sinking to $8.4-billion by 2026-27 (versus $13.1-billion).Ĭanada’s inflation rate recently hit a three-decade high, much to the chagrin of many households. The same trend applies to the five-year forecast. The deficit for the 2021-22 fiscal year that ended March 31 was $113.8-billion – much improved from the $144.5-billion projected in December. The economic recovery is a having a palpable effect on federal coffers. ![]()
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