Trudeau Liberals say Canada’s deficit could reach 8.5 percent of 2020-21 GDP
In 2018, the state deficit in Canada was about 0.39 percent of the gross domestic product, according to Statista.
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In 2018, the state deficit in Canada was about 0.39 percent of the gross domestic product, according to Statista.
The Trudeau Liberals have released a scenario analysis that puts the coronavirus pandemic into perspective for Canadians, stating that Canada's deficit could reach 8.5 percent of the 2020-2021 GDP.
In 2018, to compare, the state deficit in Canada was about 0.39 percent of the gross domestic product, according to Statista.
"Based on our economic scenario and including announced federal measures, the budget deficit would increase to 27.4 billion in 2019-2020 and then to 184.2 billion in 2021," the release reads.
To grasp just how large that is, the last time the budgetary deficit was "near 8.5 percent of the GDP was in 1984-1985," the Parliamentary Budget Officer reports.
"Compared to to our March 27 scenario, the deficit is $0.7 billion higher in 2019-2020 and $71.5 billion higher in 2020-2021."
The federal debt-to-GDP ratio is expected to hit 41.4 percent for the year, with the debt-to-GDP not hitting those levels since 2002-03, but less than the record of 66.6 percent in 1995-1996.
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View on XThe PBO states that more measures may be necessary in the coming months, despite the already announced measures. Additional measures could also come to get the economy back on track, when the time comes.
The PBO assumes that physical distancing measures will remain "in place in Canada through August, lasting roughly 6 months total."
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