Federal deficit balloons to $61.9B as government tables economic update on chaotic day in Ottawa

The federal government tabled a fall economic statement Monday that calls for more than $20 billion in new spending and explains how last fiscal year's deficit ballooned to $61.9 billion — but it was Chrystia Freeland's abrupt resignation as finance minister and her questioning of her own government's economic policy that sent Canadian politics into a frenzy.

The day was thrown into disarray when Freeland, who was meant to deliver the statement, resigned from Prime Minister Justin Trudeau's cabinet just as reporters and stakeholders were headed to a media lockup to view the document.

Those in the room were meant to receive the document under embargo at 10 a.m. ET, but dozens of copies sat shrouded under black tablecloths until 1:45 p.m. ET as officials scrambled to deal with an unprecedented situation. 

Government House leader Karina Gould ended up tabling the fall economic statement in the House of Commons on Monday afternoon just after 4p.m. ET. By dinner time in Ottawa, Public Safety Minister Dominic LeBlanc had been sworn in as the new finance minister.

Along with showing that the federal government blew its own deficit target by more than $20 billion, the document — overseen by Freeland before her resignation —  includes pledges to address U.S. president-elect Donald Trump's return to the White House.

They include $1.3 billion for a border security package over six years — part of Ottawa's plan to fend off Trump's threat of steep tariffs — although the 270-page document doesn't explain exactly how that money will be spent. The government is also earmarking billions of dollars to boost Canadian businesses amid global uncertainty.

Freeland's resignation letter suggests she did not agree with her boss on how to tackle those challenges.

In a letter addressed to Trudeau and posted to social media, Freeland, who has been finance minister since 2020, said the only "honest and viable path" for her was to leave cabinet after the prime minister approached her Friday about moving her to another cabinet role.

She also took a parting shot at her boss's handling of the country's economy, denouncing what she called the government's "costly political gimmicks" and imploring him to work collaboratively with the country's premiers to confront Trump tariff threat.

As expected, the update includes the government's promised GST holiday, which came into effect Saturday and is expected to cost $1.6 billion.

The document does not include the government's promise to send $250 cheques to working Canadians. The rebates were to be sent to people who earned up to $150,000 in 2023, but the promise faces opposition from other parties in the House.

Sahir Khan, executive vice president of the University of Ottawa Institute of Fiscal Studies and Democracy, said that apart from the expected tax holiday, Monday's document doesn't have a lot of gimmicks.

"It's actually probably the first time we've seen them pivot from a consumption-oriented, wealth redistribution budget to one that's investment-focused," he said.

"It's still borrowing for this. We're still increasing debt to do this, but there's been a pivot."