Finance Minister Bill Morneau has delivered an update on federal spending and economic projections linked to the government’s response to the COVID-19 pandemic. Read some of the highlights here.
Finance Minister Bill Morneau delivers the federal fiscal ‘snapshot’ to the House of Commons on Wednesday, July 8. 17:19
Finance Minister Bill Morneau has delivered an update on federal spending and economic projections linked to the government’s response to the COVID-19 pandemic.
Morneau is calling today’s statement an “economic and fiscal snapshot” rather than the traditional economic and fiscal statement that comes between budgets.
Morneau was forced to put off his spring budget in March after the devastating economic effects of the pandemic became clearer.
Here are some of the highlights:
Annual deficit
The deficit for 2020-21 is expected to rise to $343.2 billion from the $34.4 billion deficit projected before the pandemic.
A big chunk of that additional deficit can be attributed to the $212 billion in direct support measures the federal government is providing to individuals and businesses.
The snapshot says that, aside from the pandemic program spending, the economic slowdown is estimated to have added another $81.3 billion to the deficit in 2020-21.
GDP decline
The Canadian economy is projected to shrink by 6.8 per cent this year before bouncing back by 5.5 per cent next year, making this crisis the worst economic contraction since the Great Depression. The economy is expected to decline in 2020-21 more than twice as much as it did in 2009-10 in response to the global financial crisis.
The decline in GDP is expected to take place in the second quarter of this fiscal year, according to private sector projections of a 40.6 per cent decline in GDP.
Debt-to-GDP ratio
Due to the the financial s