This study analyzes the Justin Trudeau government’s budget forecasts from 2016 to 2025 and finds that accuracy drops sharply beyond the first year.
Four-year-ahead projections were off by an average of $94.4 billion—roughly 4 percent of nominal GDP. While current-year estimates tended to be cautious, longer-term forecasts consistently overestimated fiscal health. The results point to a persistent optimism bias likely influenced by political incentives, raising concerns about transparency, credibility, and the usefulness of Canada’s long- term fiscal planning.
