Slower than expected economic growth will sap about $22 billion annually from the Canadian economy, according to Canada’s Parliamentary Budget Officer.
In a new report, Parliamentary Budget Officer Kevin Page said that he anticipates economic growth will brake to an annual rate of 1.6 per cent in the second half of this year, after slowing to 1.8 per cent in the first half. That's at the bottom of most economic forecasts and well below the Bank of Canada's projections of growth rates of 2.2 per cent in 2012 and 2.3 and 2.4 per cent in the two years after that.
The PBO now says Ottawa has a 60 per cent probability of balancing the budget on target in the fiscal year 2015-16.
The PBO says the removal of government stimulus has robbed about one percentage point of growth from the economy. But the new forecasts have not wildly thrown Ottawa off track on its plans to return to balance, Page said, because of federal government spending restraints.