5 January 2017 - The federal cupboard is bare as Finance Minister Bill Morneau prepares the Liberal government’s second budget and fends off provincial calls to boost transfers for health care, new long-term forecasts from Finance Canada officials suggest.

A federal report projects decades of deficits, and in response, Mr. Morneau is promising to act with prudence on health-care spending.

Finance Canada’s report is the federal government’s first update to its long-term fiscal projections since the fall of 2014. The decades of surpluses Ottawa projected just two years ago have shifted to decades of annual deficits that will run beyond 2050.

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