Nov 30 (Reuters) – Canada’s budget deficit is forecast to hit a historic C$381.6 billion ($293.9 billion) on COVID-19 emergency aid, with the federal government eyeing another C$100 billion in stimulus to be rolled out once the virus is under control.
The forecast deficit is wider than the C$343.2 billion projected in July, with Canada’s federal debt now expected to top C$1.12 trillion this fiscal year.
The ruling Liberal government also pledged to set aside up to C$100 billion over three years to “jumpstart” Canada’s recovery, once the virus is under control. It did not include that stimulus in its current fiscal framework, but laid out scenarios for how it could be rolled out.
“COVID-19 is surging across Canada, right now. We know the winter ahead will be hard,” Finance Minister Chrystia Freeland told parliamentarians after unveiling the Fall Economic Statement. “But we also know that spring will follow winter … we will get through this.”
Canada has already provided some C$322 billion in direct COVID-19 supports, Freeland said. The federal debt-to-GDP ratio is now forecast to hit 50.7% in 2020-21, up from 49.1% forecast seen in July.
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