COVID Fiscal Snapshot Estimates Historic $343 Billion Deficit

Wednesday, 8 July 2020 15:11

Two million Canadians will remain without jobs this year as the COVID-19 pandemic drags down the domestic economy and federal aid sends the deficit to a historic $343.2 billion. The government believes the worst of the economic harm from the pandemic is behind the country.

The Trudeau Liberals say they expect nearly two million Canadians to remain without jobs this year as the COVID-19 pandemic drags down the domestic economy and federal aid sends the deficit to a historic $343.2 billion.

The economic and fiscal "snapshot" from the government today lays out the Liberals' belief that there will be a slow return to a new normal, with unemployment high and economic growth low through to at least the end of 2021.

Even though the government believes the worst of the economic harm from the pandemic is behind the country, the document says a recovery can't begin in earnest until an effective vaccine or treatment becomes widely available.

Things could, however, get worse under two alternative scenarios the Finance Department lays out.

Should prolonged shutdowns stay in place, or restrictions not fully roll back, a return to normal activity for households and businesses will be uneven and slower than hoped for, leading to a more pronounced drop in economic output than is already expected.

And should the country be hit with a second wave of the novel coronavirus during the annual flu season, the ensuing lockdowns would cause what the Finance Department describes as a "deeper and longer-lasting negative impact on the economy."

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