Finance Minister Bill Morneau drew an increasingly dire picture of the Canadian economy as he tabled his economic update Tuesday.

The federal deficit is set to hit to $25.1 billion by the end of the current year, falling to $14.6 billion in 2021-2022. On the surface, that looks lower than the deficit projected in last spring’s budget. But the government is no longer building in the $6 billion contingency it included last spring, meaning the deficit has actually gotten slightly worse, growing by $1.2 billion over last spring’s budget. It’s not clear when the government will bring the budget back into balance.

Despite the growing deficit, which is projected to hit a high of $27.8 billion in 2017-18, the debt to GDP ratio remains comfortable, rising no higher than 31.9 per cent.

GDP growth is down since last spring, though it’s expected to be higher than the G7 average over the next five years. Commodity prices remain low, and the Official Opposition Conservatives have hammered the government in question period over unemployment rates.

"Our economy is growing, just not as fast as we'd like," Morneau told the House of Commons.

"Since the last budget, private sector forecasters have on average revised down their outlook for real GDP growth in Canada. This is set against a backdrop of slow growth around the world due to factor such as disappointing growth in the United States, and the uncertainty surrounding the UK's Brexit vote."

To try to combat the sluggishness, Morneau pledged a flood of infrastructure funding: an additional $81 billion from 2017 to 2028 for everything from public transit to trade and transportation projects like rail and port infrastructure to make it easier to export Canadian goods. Morneau also promised a $35 billion Canada Infrastructure Bank and a new hub, known as Invest in Canada, to promote the country to global companies. He didn’t provide a deadline to set up the infrastructure bank, however, telling reporters at a press conference the implementation date would be announced in the next budget.

"Today we’re talking about big, bold, historic investments in infrastructure," Morneau said.

But the infrastructure funding promised Tuesday mostly won’t kick in until 2018, after an initial $700 million the year before. The spending will ramp up after 2019, which is the end of the current government’s mandate but a more realistic planning horizon for municipal governments and anyone involved in building infrastructure.

The government had already announced $11.9 billion in infrastructure spending in last spring’s budget.

"Projects are now moving forward… we are largely on track," Morneau said of the projects announced last spring. "We’re pleased with the implementation... We’re looking forward to doing more."

The projects the government is embarking on now, Morneau said, are going to start having an impact.

The $81 billion promised in the economic update includes:

$25.3 billion for public transit over 11 years

$21.9 billion for green infrastructure over 11 years

$21.9 billion for social infrastructure like affordable housing, child care centres and recreational infrastructure over 11 years

$10.1 billion for trade infrastructure over 11 years

$2 billion for infrastructure in rural and northern communities, including internet connectivity and expanding road access, over 11 years

$35 billion for a Canada Infrastructure Bank, including $15 billion from the other infrastructure funds

$218 million for “Invest in Canada” hub to attract new business

Other measures promised in the update:

Faster visa processing for low-risk, high-skill talent

New work permit exemptions for people spending less than 30 days a year

The trade and transportation infrastructure will emphasize marine safety, the economic update document says. That’s a key demand of British Columbia Premier Christy Clark before she will agree to the development of the Kinder Morgan TransMountain pipeline through Burnaby, B.C. The federal cabinet is to decide in December whether to allow the pipeline.

Bulk of spending two years away

With the bulk of the infrastructure spending not expected to start for another two years, Morneau seems to be relying on the appeal to global investors to boost the economy.

At the same time, the government has created a challenge for itself in its attempt to attract highly skilled immigrants: it increased income taxes on the highest-earning bracket, which could deter the highest potential earners from moving to Canada.

Along with the bid to attract global companies to set up shop in Canada, Morneau also announced the government will make it easier to buy Canadian companies. The economic update announced a plan to increase the threshold to trigger reviews under the Investment Canada Act to $1 billion in 2017, two years sooner than planned. The government has also pledged to produce guidelines for reviewing investments under national security provisions.

Kevin Page, the former parliamentary budget officer who is now the Jean-Luc Pepin research chair at uOttawa, says he hopes the government will introduce clear rules for how to use a contingency fund.

"A number of months ago we were complaining that the government just kind of threw it out there. It was a large contingency reserve... Now it's gone. We spent it," he said.

The government also included provisions to improve transparency in its spending. The parliamentary budget officer will be converted to a full officer of Parliament who reports to the House and the Senate, giving the watchdog more independence. The budget officer’s mandate will also be expanded to allow the watchdog to review and report on party platform estimates – but only at the request of the party.

Page said he's grateful the Liberals are changing his previous office.

"It's a big day for the Parliamentary Budget Office," he said.

Aside from the economic pledges, the update included a promise to make to it easier to understand the federal budget cycle. Parliament sees several different financial documents tabled over the course of the year. Some of them are out of date by the time they are made public, making it harder to track spending.

'A failed plan'

Interim Conservative leader Rona Ambrose called the government's strategy to create jobs by increasing spending "a failed plan."

"Canadians are now paying for it," Ambrose said outside the House. "Since the prime minister was elected, he has not created one additional full-time job in our economy."

Ambrose said the government is making life more expensive for Canadians by raising taxes, but leaving fewer job opportunities.

"They are now committed to record levels of deficits and record levels of spending. But, as we all now, borrowed money needs to be paid back," Ambrose said.

NDP Leader Tom Mulcair noted there was nothing in the update about creating jobs, especially when it comes to young Canadians, who face a higher unemployment rate. He also criticized the infrastructure bank for incorporating private sector funding.

"There was never a word said by Mr. Trudeau about a privatization bank during the election campaign. After having promised a small deficit to invest in infrastructure, the money promised to municipalities is being taken away and given to this privatization bank, and it's going to come back on taxpayer's shoulders in the form of higher tolls and user fees," Mulcair said.

"That’s the reality of what’s being announced today."