Economic and Fiscal Snapshot 2020 is presented in the House of Commons
July 11, 2020
Global Korean Post
The COVID-19 crisis is a public health crisis and an economic crisis. The Economic and Fiscal Snapshot 2020 lays out the steps Canada is taking to stabilize the economy and protect the health and economic well-being of Canadians and businesses across the country.
On July 8, in the House of Commons, Finance Minister Bill Morneau presented an economic and fiscal snapshot outlining the state of the federal government’s finances.
The federal government has used its strong fiscal position to stabilize the economy and support Canadians by putting in place the largest economic aid package in generations. The government is projecting a $343-billion deficit this year, due largely to the federal economic measures that have been put in place in response to the ongoing COVID-19 pandemic.
The Liberal government has postponed the release of its federal budget and has opted not to present a more detailed fiscal update due to the economic uncertainty caused by the coronavirus pandemic. The economic snapshot focuses on short-term forecasts for the upcoming months.
While the toll of COVID-19 on the broader economy in 2020 is expected to be the largest and most sudden economic contraction since the Great Depression, measures to flatten the pandemic curve in Canada are paying off, and efforts are underway across the country to safely and gradually reopen the Canadian economy.
The temporary measures implemented through the government’s economic response plan will have a significant impact on the federal deficit. Coupled with the severe deterioration in the economic outlook, these result in a projected deficit of $343.2 billion in 2020-21.
While this year’s deficit estimate is elevated, the government’s response is in line with the fiscal response deployed by other comparator countries. Coming out of the crisis, Canada is expected to maintain its low debt advantage among G7 countries.
Relative to the 2019 Economic and Fiscal Update, budgetary expenses are projected to be higher in 2020-21 largely due to the economic impacts of the COVID-19 crisis.
By the Global Korean Post with files