Canada's Deficit Warning: $117B by 2035

0:00It's April 8th. This is Calgary News Today, AI-powered stories from your city. I'm Cory with the Story. A top Canadian economist, Trevor Tom, from the University of Calgary just dropped a study warning that our federal deficit could balloon to 1, 117 billion dollars by 2035 if nothing changes. That's way bigger than the already massive 78 billion dollar shortfall projected for next year's budget, the largest ever outside the... The biggest driver? New NATO commitments pushing military spending to 3.5% of GDP by 2035, which means ramping up by about 100 billion dollars total, or 10% a year. Tommy says this, plus other pressures, will make spending outpaced revenues unless we adjust course fast. Canadians are right to worry. This puts us on track for a 1990's repeat, where debt payments aid up a third of revenues and public debt hit. We've already been in the red for 18 straight years since the global financial crisis

1:04and another decade which shatter records since 1867. Even if we skip the higher defense target and stick to 2% of GDP, deficits would still hover in the tens of billions through 2035, with no balanced plan in sight through 2029. Raising taxes alone won't cut it. To balance by then without cuts, the GST would need to jump from 5% to 12.5%. Tommy suggests smart trims, like tying elderly benefits to GDP growth so they rise but slower. Plus easing business regs for 0.5%, extra annual growth netting 20 billion more in revenue. Time for Ottawa to blend restraint with real economic boost before the hole gets too deep.