The foundation of the fiscal plan over our mandate is a planning framework that is realistic, sustainable,prudent, and transparent. These are core principles advocated by Canadian fiscal experts.

A realistic approach recognizes that the economic and fiscal projections of the federal government have deteriorated since the budget was tabled in April. This year, 2015, started with a recession, the economic and fiscal impacts of which have been projected by the Parliamentary Budget Officer using the Bank of Canada’s July Monetary Policy Report.

Real GDP growth projections (%) 2015/16 2016/17 2017/18 2018/19 2019/20 Budget 2015 (April) 1.9 2.3 2.3 2.2 2.0 PBO 2015/16 – 2017/18 and projection

2018/19 – 2019/20 1.0 2.7 2.4 2.2 2.2

Projections in fiscal years – per PBO format

We project a reduction in the budget’s assumption for nominal GDP levels and fiscal balance, which only begins to mitigate in 2018/19 and 2019/20. This reflects the Bank of Canada’s projections for sharply lower real GDP growth in 2015, and slight increases in real GDP growth in outer years versus budget forecasts, as excess capacity from the recession is recovered.

External economic projections continue to change and these represent realistic projections for the years ahead. A new Liberal government will release a fall Economic and Fiscal Update so that Canadians can get a more accurate picture of the federal government’s revised position since April.

In every year of our plan, federal debt-to-GDP will continue to fall. Canada benefits from a low debt-to-GDP level and historically low borrowing rates. Our plan ensures that the government of Canada remains in a sustainable fiscal position. We have two fiscal anchors that guide our overall fiscal framework.

In 2019/20, we will: Reduce the federal debt-to-GDP ratio to 27 percent

Balance the budget

Our plan is anchored in prudent forecasting, including restoring a contingency reserve as we return to surplus, and not budgeting for the positive fiscal impacts of new investments.

We will raise the bar on fiscal transparency. We will ensure accounting consistency among the Estimates and the Public Accounts; provide costing analysis for each government bill; restore the requirement that government borrowing plans receive Parliamentary approval; end the inappropriate use of omnibus legislation; and we will ensure the Parliamentary Budget Officer (PBO) is truly independent, properly funded, and answerable only, and directly, to Parliament.

We will also add the costing of political party platforms to the PBO’s mandate, as is the case in Australia and the Netherlands, so that starting in the next federal election, Canadians can review the fiscal plans of political parties from a credible and comparable baseline.