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For fiscal 2017-18, the PBO expects the deficit to widen to $24.9 billion, although that is also smaller than the government’s projection of $29.0 billion.

The PBO’s deficit forecast for 2016-17 to 2020-21 is on average $4.8 billion lower than the projections in the government’s budget.

The government will update its fiscal position next week.

Some believe lackluster economic growth will mean larger-than-anticipated deficits. Economists at Toronto-Dominion Bank recently said the deficit was on track to hit $34 billion in the current fiscal year.

The economy has struggled to regain sustainable momentum after a drop in oil prices and recent wildfires in Alberta. The one-year-old Liberal government came to power on a promise to stimulate growth through spending.

Those measures from the government, along with ongoing low interest rates from the Bank of Canada, will help economic growth rebound from 1.2 per cent this year to 2.3 per cent in 2017, the PBO said.

The Finance Department has forecast 2.2 per cent growth for next year, while the Bank of Canada expects just 2.0 per cent.

The PBO sees growth averaging 1.8 per cent annually from 2016 to 2021, unchanged from its April report.

Thomson Reuters