How scary are Canada’s federal deficits really? Parliamentary Budget Officer Yves Giroux was alarmed after the recent fiscal update projected a deficit $7 billion higher than the budget announced in March. As it turned out, much of the blame was due to accounting changes on pensions and benefits for federal employees.
Strangely, many observers, including Giroux, want changes to the accounting practice. In reality, the more urgent and necessary policy is to scale back those pension obligations themselves.