* 2009-11 budget deficit estimates similar to government's
* Structural deficit seen in 2013-14
* Economy to recover full potential at end 2013
(Recasts, adds details throughout)
OTTAWA, Nov 2 Canada's economy will not fully
recover until 2013 and the federal government will carry a
structural budgetary deficit of C$19 billion ($17.6 billion)
after the crisis, a report by the parliamentary budget officer
said on Monday.
The budget officer (PBO), Kevin Page, issued a report
revising his fiscal and growth forecasts and bringing them
roughly in line with those of the Conservative government of
Prime Minister Stephen Harper, showing Canada is one of the G7
countries to better withstand the global financial crisis.
But he differed with the government on the politically
sensitive issue of whether it will be able to balance its books
again within five years, based on economic growth and
"PBO calculations continue to suggest that the budget is
not structurally balanced over the medium term," the report
"PBO estimates that the structural balance would
deteriorate from essentially a balanced position in 2007-08 to
an C$18.9 billion structural deficit in 2013-14."
Finance Minister Jim Flaherty's latest fiscal projections
in September showed a small deficit of about C$5 billion in
2014-15 but Flaherty later said he hoped to eliminate that
deficit "five years from now."
After a decade of surpluses, the government opted to fall
into deficit again to implement a nearly C$50 billion stimulus
package to combat recession. The size of that deficit has been
growing as the real magnitude of the downturn becomes known.
Page's report forecast a 2009-10 budget deficit to C$54.2
billion, or 3.6 percent of gross domestic product, slightly
under the government's estimate in September of a deficit of
He predicted a deficit in 2010-11 of C$43.1 billion,
compared with the government's projection of a C$45.3 billion
The cumulative budgetary deficit in the years from 2009-10
to 2013-14 would total C$167.4 billion, he said.
Page's outlook for GDP is based on private-sector forecasts
and is therefore the same as that of the government. He sees an
annual contraction of 2.3 percent in real GDP this year and
growth of 2.3 percent next year.
Based on its own calculation of potential output -- the
rate at which the economy can grow without triggering excess
inflation -- the PBO forecast the Canadian economy will not
return to potential until the end of 2013.
"On a cumulative basis, this represents a loss of over
C$200 billion in unrealized output ... similar in percentage
terms to the cumulative loss experienced in the 1990s
recession," it said.
(Reporting by Louise Egan; editing by Peter Galloway)