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.
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.
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