OTTAWA — The Canadian economy will slow to a crawl over the coming months, which will lead the Carney government to increase both its borrowing and interest payments more than what was expected just four months ago, Ottawa’s fiscal watchdog said Tuesday in a new report.
With the federal budget scheduled for Nov. 5, the Parliamentary Budget Office (PBO) added to the government’s fiscal squeeze by projecting that the Canadian economy will grow this calendar year by just 0.9 per cent and 1.5 per cent in 2027, down from the 1.1 per cent and 1.6 per cent that were forecast just four months ago. The slower growth is primarily a function of the Canada-United States trade war escalation that started in June.
