Canada's deficit this year will reach its biggest ever this year of more than $50 billion because of the deep economic recession, Finance Minister Jim Flaherty said Tuesday.
Flaherty raised his estimate from the $33.7 billion shortfall he forecasted in January's budget. The deficit will be the country's first after more than a decade of budget surpluses.
We are going through a deeper economic slowdown than anticipated, said Flaherty.
We are also seeing the substantial auto payments that are going to be required. As a result of all of that, we will run a substantial short-term deficit this year which I would estimate at more than $50 billion, he told reporters.
He said the recession has hurt government revenues from personal and corporate taxes and raised spending requirements.
Parliamentary budget officer Kevin Page had said the budget forecast was too rosy. He released a report in March predicting it would be at least $9 billion higher than anticipated over the first two years.
Prime Minster Stephen Harper promised on Tuesday the deficits would not be long-term.Our deficits are affordable but they will remain short-term.
He said that they were modest compared with deficits being racked up by other nations.