By Erik Hertzberg
(Bloomberg) — One of Canada’s major lenders says Prime Minister Mark Carney will push the country’s deficit to about 3% of its gross domestic product as his government pursues major projects and tries to attract more investment.
Stefane Marion, National Bank of Canada’s chief economist, said he expects Ottawa’s fiscal shortfall will reach $100 billion this fiscal year, more than double the $42 billion the government forecast in December.
Speaking at Bloomberg’s Canadian Finance Conference on Tuesday, Marion called Carney’s upcoming fiscal update on Nov. 4 the “most consequential budget in a generation” after a decade of “sub-optimal” economic policy.
Canada’s deficits are in a relatively good position compared to other Group of Seven countries, he said.
“We do have some fiscal room when you compare Canada to the rest to the world,” Marion said. “We should not 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, defence and housing to help boost Canada’s sagging productivity.
Investment in Canada has stagnated since 2015, a major contrast with the U.S., where business outlays have flourished. That’s due in part to limited capital spending in Canada’s energy sector, which has contended with lower oil prices and growing regulatory burdens.
Carney’s plan to review federal regulations that may be stunting Canada’s potential to become an energy and industrial superpower is another step in the right direction, Marion said.
“We’ve been stranding these assets by not knowing whether or not we could exploit them down the road,” he said. “If you’re going to re-industrialize and the U.S. wants to re-industrialize, I can find no better partner than Canada.”
He also pointed to Canada’s relatively clean electricity sector as a major opportunity for foreign investment.
“I’m optimistic that Ottawa is serious about improving the outlook,” he said.
Marion sees the Bank of Canada cutting the policy rate by a quarter-point to 2.25% at its next meeting on Oct. 29, but says the central bank will likely pause as policymakers parse the details of the federal government’s budget.
“It will be a stimulative budget,” Marion said.
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Last modified: October 8, 2025
