Erik Hertzberg
(Bloomberg) – Prime Minister Mark Carney will push the country’s deficit to 3% of its gross domestic product as his government pursues big projects and tries to attract more investment, one of Canada’s major lenders said.
National Bank of Canada chief economist Stefane Marion said he expects Ottawa’s fiscal shortfall to hit $100 billion this fiscal year, more than double the $42 billion the government forecast in December.
Marion was speaking at the Bloomberg Canada Finance Conference, where her Nov. 4 fiscal update was “the most important budget in a generation” after a decade of “suboptimal” economic policies.
Canada’s deficit is in a relatively good position compared to other groups in the seven other countries, he said.
“When you compare Canada to the rest of the world, we do have some conference room,” Marion said. “We shouldn’t waste it.”
Marion is among a growing chorus of economists and business leaders who are optimistic about the government’s plans to invest in infrastructure, defense and housing to help boost Canada’s sagging productivity.
Investment in Canada has stagnated since 2015, contrasting with the United States where corporate spending has boomed. This is partly due to limited capital spending in Canada’s energy sector, which sees lower oil prices and growing regulatory burdens.
Marion said Carney’s plan to review federal regulations that could hinder Canada’s efforts to become an energy and industrial superpower is another step in the right direction.
“We never knew if we could use them down the road,” he said. “If you’re going to re-industrialize, and the United States wants to re-industrialize, I can’t find a better partner than Canada.”
He also pointed to Canada’s relatively clean power sector as a major opportunity for foreign investment.
“I’m optimistic that Ottawa is taking the prospects of improvement seriously,” he said.
Marion sees the Bank of Canada cutting its policy rate by a quarter of a point at its next meeting on Oct. 29, but said the central bank may pause as policymakers parse details of the federal government’s budget.
“This is going to be a stimulus budget,” Marion said.
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Last modified: October 8, 2025
