Federal budget on March 22 to address 'significant' economic decline

The Department of Finance is anticipating a “significant deterioration” of the economy in 2016 and has made some major revisions to the economic forecast ahead of the federal budget.

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Finance Minister Bill Morneau announced Monday that the budget will be released on March 22. He said the government is now forecasting deficits of $18.4 billion in 2016-17 and $15.5 billion in 2017-18. The economic downturn is also expected to wipe out more than $61 billion from the federal treasury.

The new projections are based on expectations that U.S. economic growth “may again disappoint” in 2016, and negatively affect Canadian exports, as well as incentives to expand the energy sector.

Because the global oil market is over-supplied, declining oil prices may not rebound as quickly as previously expected. In the meantime, the loonie is expected to hover around 72 cents U.S.

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