That's over $16 billion more than he forecast in January's federal budget.

In that budget, Ottawa estimated it would run deficits for five years and predicted a shortfall of $64 billion over the next two years.

On May 25, Flaherty said the deep recession is wreaking havoc on the government treasury and will cause the deficit to balloon substantially more than projected.

He said the recession has hurt government revenues from personal and corporate taxes and raised spending requirements.