Federal deficit could hit $256 billion due to pandemic
Shady Salah – Media in Toronto
This year’s federal deficit could hit $256 billion due to the COVID-19 pandemic and weak oil prices, according to parliamentary budget officer. The result, posted Thursday, is the combination of an estimated total of $169 billion in federal spending on emergency aid and a historic drop in economic output.
The economy could shrink by 6.8 per cent in 2020, the weakest showing since 1981 and double the record of 3.2 per cent shrinkage in 1982, according to the estimate. The overall deficit figure is only $3.8 billion higher than budget officer Yves Giroux’s previous predictions, which his report says is due to a better economic outlook in the second half of the year that offsets some new spending.
Trudeau warned the document won’t provide a longer-term outlook because of what the government says is the uncertainty about where the economy will go in the coming months and years all of which
rests on the path of the pandemic.