Parliamentary Budget Officer Kevin Page says Canada is "probably" better placed to deal with an economic recovery than other industrialized countries.
Page said the current economic situation is unusual because all countries are facing a recession.
"Our fundamentals are better for the most part in terms of balance sheets," Page told CTV's Canada AM on Thursday. "Even fiscal balance sheets going in are better so we are probably better placed to deal with recovery going forward."
On Wednesday, Page released a report showing Canada's federal deficit will balloon to a cumulative $155.9 billion over the next five years, and the nation will remain in the red until at least 2014.
The report's predictions are far less rosy than those put forward by Finance Minister Jim Flaherty. He predicted a $100 billion cumulative deficit over five years, ending with a $700 million surplus in 2014.
"The forecast that Minister Flaherty released in January was a number of months ago and the environment has changed," Page said Thursday.
"...It's an updated forecast, it's slightly weaker and I think that's reflected in the fact that the deficit projections are higher."
The report predicts that despite the government's stimulus plans, 1.2 million Canadian jobs will be shed over the next two years.
Although the Tories said last month that 80 per cent of stimulus measures were already being implemented, Page said most of the money hasn't really "flown yet."
"Those shovels aren't in the ground. It's only over the summer time and as we move to the fall that we'll see that stimulus actually have an impact on the economy," he said.
The report also predicts Canada's GDP growth will fall further in 2009 and 2010, before beginning to recover in 2011.
Page said there is much debate among private sector economists about how strong the economic recovery will be.
Most frightening for fiscal conservatives is that Page predicts that in five years Canada will have a permanent structural deficit in place.
The Tories have for months insisted that the government had not created a structural deficit -- one that cannot be erased by economic growth alone.
"Mr. Harper has told Canadians that there will not be a structural deficit," Liberal MP Scott Brison told Â鶹´«Ã½. "Kevin Page, the parliamentary budget officer, is saying that that's absolutely wrong. I trust Kevin Page more than I trust Stephen Harper when it comes to the numbers."
The report acknowledges there is a high degree of uncertainty in estimating potential outputs and budget balances, but comes to the conclusion that the budget "is not structurally balanced over the medium term."
