Chrystia Freeland to present her fall economic update on Dec. 16

Finance Minister Chrystia Freeland will table her much-anticipated fall economic update next week — a document that will give Canadians a look at the federal books at a time of great economic uncertainty.

The statement, to be tabled in Parliament on Dec. 16, will reveal whether Freeland is keeping her promise to hold the federal deficit for 2023-24 to $40.1 billion or less. The parliamentary budget officer already has said she's unlikely to hit that mark.

Freeland also vowed to lower the debt-to-GDP ratio and keep it on a downward trajectory for the years to come — a commitment that could be tested by new big-ticket items like more money for the military and funds to better protect the border to satisfy U.S. president-elect Donald Trump's concerns about migrants and drugs.

Those budget line items come as Canada is expanding the social welfare state with new programs like dental care and pharmacare, and a national school food program to feed tens of thousands of kids.

Freeland also has to book the substantial one-time costs associated with the GST/HST holiday and $250 cheques for working people — a program that is stuck in limbo as the NDP demands that it be extended to more people.

Freeland's update, which is expected to offer fiscal projections for the year ahead, also will have to account for the recession that would follow if Trump goes ahead with a 25 per cent tariff on all Canadian goods.

Those tariffs have the potential to cripple the economy. TD Bank warns that a levy of just 10 per cent could "deliver severe negative economic impacts," with U.S.-dependent sectors like autos, oil, chemicals and forestry products most affected.

Freeland's document will reveal the size of the national debt and how much it will cost to service that debt. The debt ballooned in the COVID years as Ottawa propped up an economy on the ropes.

In the spring budget, Freeland projected the debt would rise to $1.25 trillion this year and cost $54.1 billion a year to finance. If that figure holds, the federal government will spend more on servicing its debt than on health care this year.

Conservative Leader Pierre Poilievre criticized the government over the late timing of the statement — it's usually tabled earlier than mid-December — and urged it to rein in spending to get the country's finances under control.

"Our message is stop — stop the inflationary spending, stop the tax increases on food and homes, stop indebting Canadians. Will you please just stop," Poilievre said in question period.

He said Freeland's document is likely to show she has blown past her so-called "fiscal guardrails" of keeping the deficit at $40.1 billion or below and maintaining a declining debt-to-GDP ratio.

"What's on the other side of a guardrail? A cliff. Is this minister leading us off the cliff?" he said.

Prime Minister Justin Trudeau and Freeland were not in the House of Commons Monday to field Poilievre's questions.

Later Monday, Freeland appeared before a committee of MPs and was pressed by Conservative MPs on the country's finances.

Asked what the deficit will be by Conservative MP Rick Perkins, Freeland sidestepped the question, saying the fall economic statement will provide "full transparency about Canada's financial position."

Perkins pressed Freeland on whether the deficit will go above $40 billion. Freeland again did not provide a specific answer. 

"I do want to be very clear and assure all MPs and all Canadians that Canada's public finances are sustainable," she said.

Earlier Monday Justice Minister Arif Virani defended the government's fiscal track record, saying its spending on child care has encouraged more 110,000 women to rejoin the workforce — a boost to the economy.

"That is what we stand behind on this side of the house," Virani said.

Quoting a previous Bank of Canada governor, Virani said that the last Conservative government was "obsessively focused" on a balanced budget and that hurt the country's growth prospects.

"We're not going to follow that playbook because it didn't work," he said.