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

Canada Emergency Response Benefit

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.

RELATED: This COVID-19 Cases Map Will Make Canadians Happy The Border Is Closed

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.

For more Vancouver news, head to our News section.

Log in or create an account to save content