(Bloomberg) -- The cost of Prime Minister Justin Trudeau’s fiscal package to protect the economy from the impact of Covid-19 has reached about C$250 billion ($176 billion) , according to the latest figures from the finance department.
One of the flagship programs, a plan to subsidize 75% of wages for Canadian workers, will cost C$71 billion, Finance Minister Bill Morneau told reporters Wednesday in Ottawa. Along with other measures such as the monthly income replacement scheme, direct support for companies and households will run the government C$105 billion, Morneau said.
On top of that, tax deferrals from delayed filings and sales-tax rebates will add a further C$85 billion to the total tab. There’s also C$25 billion earmarked for a credit program for small businesses, and C$40 billion in liquidity available through government lending agencies.
Officials are rushing to stem the damage to the economy from pandemic-induced business closures and record-low oil prices. In the 10 days between through March 25, some 1.6 million Canadians applied for jobless benefits.
“We need to deal with the urgent and immediate issue around supporting Canadians,” Morneau said.
When asked how the new measures would affect the government’s deficit, the finance minister declined to give a specific forecast. “Now in our estimation is not the time for us to be coming up with our estimates of where we’ll be in six months or twelve months,” he said.
The cost of the fiscal package will push the federal government’s shortfall to a record C$180 billion in the 2020-21 fiscal year, or almost 8% of the total economy, Andrew Kelvin and Robert Both, strategists at TD Securities, wrote in a note to clients. They expect Government of Canada issuance to reach C$270 billion in the current fiscal year to help finance the measures.
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