Federal Spending Hits Levels Unseen Since World War 2, Amid Pandemic

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Canada’s finance minister Bill Morneau has tabled a fiscal snapshot of the government’s deficit, which shows federal spending at unseen levels.

The federal government’s deficit is expected to hit $343 billion this year, after spending has reached a level not seen since the Second World War.

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This is due to pandemic-related support programs, which have helped cover wage losses and kept businesses afloat.

“Some will criticize us on the cost of action,” Morneau said in a speech in the House of Commons. “But our government knew that the cost of inaction would’ve been far greater.”

The fiscal snapshot shows the Federal debt-to-GDP ratio is expected to rise to 49% in 2020-21, from 31%.

The GDP will also shrink by a projected 6.8% this year, which is the worst it’s been since the Great Depression.

However, the economy is expected to bounce back by 5.5% next year.

B.C. is currently in Phase 3 of its Restart Plan, meaning many businesses are opening back up. However, many have also had to close their doors for good.

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