OTTAWA — A new analysis of federal finances ahead of the much-anticipated fall budget argues Ottawa's fiscal position was made worse by its decision to drop counter-tariffs and cut income taxes.

Desjardins deputy chief economist Randall Bartlett says in a new outlook published ahead of the Nov. 4 federal budget that Ottawa's deficit is likely to be among the largest in recent memory outside of a recession or pandemic.

He estimates the federal deficit will hit $74.5 billion for this fiscal year, $6 billion higher than the parliamentary budget officer's projections.

Bartlett says higher spending on defence and infrastructure will push the federal government's deficit up this year, but so too will Ottawa's decision to cut income taxes over the summer and to drop counter-tariffs on the Unit

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