We need to know how much fiscal fire power Ottawa has left: Independent senator
Justin Trudeau’s government will unveil the impact of emergency COVID-19 spending on Canada’s finances in a budget update next week.
Finance Minister Chrystia Freeland told lawmakers Monday that her department will release new deficit projections on Nov. 30. The economic statement could also include details of new permanent spending on long-term priorities including childcare.
“We entered this crisis with a strong fiscal position,” Freeland said in the Ottawa legislature. “Our plan will continue to support Canadians throughout the pandemic and ensure that the post Covid economy is robust, inclusive and sustainable.”
Canada is facing its deepest budget deficit since World War II after the prime minister unveiled massive emergency spending on income supports in response to the pandemic. In July, Freeland’s predecessor projected a $343 billion (US$262.2 billion) shortfall this fiscal year, or 16 per cent of total output.
The government has since announced an additional $40 billion in spending, and Freeland has rejected calls for restraint until the pandemic subsides. Last week, Moody’s Investors Service reaffirmed Canada’s Aaa credit rating, citing economic strength and “policy effectiveness” that make it resilient to shocks like the coronavirus.