After weeks of record spending, the Trudeau government is projecting a $343.2 billion deficit in the upcoming fiscal year, Finance Minister Bill Morneau said in a fiscal “snapshot” Wednesday afternoon.
Added debt will bring the net federal debt to $1.2 trillion by next March, with a projected debt-to-GDP ratio to rise to 49.1% in 2020-2021.
The deficit forecast is 10 times higher than the previous fiscal year’s deficit. Before the coronavirus pandemic, Morneau had projected a $28.1 billion deficit for this year.
Morneau did not reveal a plan to balance the budget in his update.
“We faced an enormous shock to our system,” Morneau said to reporters.
“It’s hard to know where we will be in a month, two months, or six months.”
The Canadian government will spend more this year than it did during the entirety of the Second World War, even adjusted for inflation.
Since the coronavirus pandemic began, Prime Minister Justin Trudeau has announced various economic measures in an attempt to financially assist Canadians and businesses and stimulate the economy as a result of mandatory lockdowns.
In May, Parliamentary Budget Officer Yves Giroux told the House of Commons finance committee his office couldn’t keep track of the Trudeau government’s record-breaking spending.
At the time, Giroux predicted that federal debt could reach $1 trillion this fiscal year and that “the figure of $252.1 billion is very likely to be a very optimistic scenario.”
In June, Canada’s unemployment rate rose to 13.7%, topping the previous high of 13.1% set in December 1982. Canada now has the highest rate of unemployment in the G7.
