Federal deficit to exceed $112 billion in coming fiscal year: PBO

By The Canadian Press | March 27, 2020 | Last updated on March 27, 2020
1 min read

Parliament’s budget watchdog is projecting that the federal deficit for the coming fiscal year could be $112.7 billion, a jump of $89.5 billion from previous forecasts as government spending climbs to combat the economic fallout from Covid-19.

The report made public this morning also warns that the deficit for the current fiscal year, which closes March 31, could be $26.7 billion, which would be an increase of $5.5 billion compared to the budget officer’s November forecast.

The projected deficit for the 2020-2021 fiscal year doesn’t include extra spending the Liberals announced on Wednesday in the form of a new benefit for affected workers.

That measure pushed direct spending on the government’s economic bailout package to $52 billion from $27 billion.

Parliamentary budget officer Yves Giroux’s report also predicts that the economy will contract by 5.1% this calendar year, the weakest on record since 1962.

Giroux says in his report that extra stimulus measures may be required to ensure the economy hits “lift-off speed,” especially if consumer and business behaviour does not quickly revert back to “normal” fast enough.

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