Article content

OTTAWA — The deficit under Prime Minister Justin Trudeau is likely to deepen in coming years due to a slump in economic growth, further weakening the Liberal’s fiscal position as it seeks to juggle an incoming minority government.

On Thursday, the Parliamentary Budget Office said it expects budget deficits to be an average of $1.6 billion higher over the next five years, owing to growing fears over international trade disputes and lacklustre Canadian exports that are likely to shrink the Canadian economy. The increase does not include promises Trudeau made during the campaign, which will further nudge spending upward.

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or Trudeau to face weakened fiscal position, deepening deficits amid slumping economy: budget watchdog Back to video

Higher deficits would put additional fiscal strain on the Trudeau government as it seeks to secure the support of the NDP, who has called for higher spending on pharmacare and social housing, among other programs.

A lowered economic outlook comes amid increasing concerns that a trade war between China and the U.S. could spill over into the Canadian economy, snarling exports and causing business investment to dry up. Lower public spending by the Alberta government was also cited by the PBO as a reason for the downgrade.