‘These measures have to be allowed to sunset, otherwise we’ll be looking at a level of taxation that’s not been seen since for generations,’ Yves Giroux said
OTTAWA — The government will eventually make the “unavoidable” decision to seek new sources of revenues through tax hikes, as policymakers look to offset a raft of recent Liberal spending measures, the federal budget watchdog says.
As the Canadian economy reopens, rising GDP is expected to cover some portion of the government’s fiscal shortfall, which the PBO estimates could reach $260 billion in 2021. But some economists say tax hikes will be required in order to fill the gap. “We know that we are going to need to face up to those [fiscal] challenges,” Morneau told the CBC. “We also recognize that raising taxes is not what Canadians want us to do.”
The PBO on Tuesday also raised slightly its estimate for the federal deficit in 2021, from $252 billion to $260 billion. The office is planning to release official updated estimates for federal spending and GDP sometime in June, he said.
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