(Bloomberg) -- Justin Trudeau doesn’t appear to be in any rush to release a budget update showing a record deficit thanks to hundreds of billions in government Covid-19 relief.
The prime minister, under pressure to detail the spending from opposition parties in a minority parliament, was asked repeatedly at a daily briefing Tuesday about when he’d offer a formal look at Canada’s books. He stressed his government’s commitment to transparency but said the situation is changing too fast to make reliable forecasts.
“Any predictions we make will be wildly unreliable even from one week to the next,” he told reporters outside his Ottawa residence. “There are so many things that we simply don’t know that making projections about what our economy could look like six months or a year from now would be an exercise in invention and imagination.”
Trudeau’s team had set a budget date for March 30 but abandoned it when the coronavirus pandemic forced the government into action, shutting down large swathes of the Canadian economy and opening the public purse to cushion the blow.
Earlier Tuesday, BNN Bloomberg reported that Finance Minister Bill Morneau is working on an economic update that will tally the costs of pandemic-related spending for release this summer. Requests for confirmation from Morneau’s press secretary weren’t immediately returned.
The government decided in recent days to move forward with a fiscal update amid pressure from opposition parties, the television network said, citing two unnamed people with knowledge of the plan. But there is tension within Trudeau’s cabinet as to whether a mini-budget would be a distraction, according to BNN.
The parliamentary spending watchdog expects Canada’s budget deficit to mushroom to at least C$260 billion ($194 billion), the largest in history, because of emergency programs to support individuals who have lost work and subsidize businesses grappling with force shutdowns. A gap of that size would be about 12% of gross domestic product, and it’s only likely grown since.
“It shouldn’t be a surprise to anyone if the deficit is projected to be around 15% of GDP. This was an unprecedented shock which required an unprecedented response. The reason the economy is not in worse shape at the moment is largely because of the aggressive actions of fiscal and monetary policy makers,” Royce Mendes, an economist at Canadian Imperial Bank of Commerce in Toronto, said by email. “That’s what should be remembered if the government produces a fiscal update which shows a lot of red ink.”
(Updates with potential summer timing in second graph and Trudeau comments)
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