On November 30th local time, the federal government of Canada announced a new round of budget totaling 381.6 billion Canadian dollars to deal with the coronavirus epidemic, setting a new high in the budget deficit again. This will also increase Canada’s total debt to 14 trillion Canadian dollars in March next year, and the debt-to-GDP ratio rise to 50.7%.
In this 237-page budget report for fiscal year 2020-2021 entitled “Supporting Canadians in the Fight against the Coronavirus”, the Canadian government has made a new assessment of the federal fiscal situation, the impact of the coronavirus epidemic, the contraction of the economy, etc.
The report shows that the federal government has spent $322 billion since the outbreak of the epidemic in Canada in March. Factors contributing to the increase in the budget include the provision of $251 billion in support to industries hit hard by the epidemic in the coming months and the initial recovery after the epidemic.
In July this year, the federal government made an estimate based on three situations of epidemic control. Under good control, the total budget is about 343.2 billion Canadian dollars, and if the control situation is general, it can reach 388.8 billion Canadian dollars. Under poor control, the budget will rise to 39.7 billion Canadian dollars.
“This is the worst challenge Canada has faced since World War II, the Great Depression, with severe economic shocks, the worst public health crisis since the Spanish flu a century ago,” said Canadian Deputy Prime Minister and Finance Minister, Cristian Freeland, in the House of Representatives, when releasing the budget report.
According to Statistics Canada, Canada’s unemployment rate will not return to the pre-epidemic level until the summer of 2022.