Federal Deficit to Hit $343 Billion
CBJ — The national deficit is on track to reach levels not seen since World War Two.
The massive deficit of $343 billion is due in large part to massive economic aid and stimulus plans provided to Canadians and businesses during the global COVID-19 pandemic.
In December, 2019, the federal government projected the deficit for fiscal 2020-21 would be about $28 billion. Since, then it has risen by a staggering $315 billion.
The federal government says the national debt will exceed $1.2 trillion by the end of the fiscal year, up from $765 billion in the previous fiscal year.
With unemployment rates set to remain high into 2021, the government is also projecting a $71 billion decline in tax revenue, including a $40.8-billion loss in income taxes.
The government has spent more than $231 billion in health and safety measures as well as on direct aid to Canadians and businesses over the course of the pandemic to this point.
“We need to invest in an economy that is greener and more diverse,” says Federal Finance Minister Bill Morneau. “This pandemic has identified clear gaps and it’s giving us a chance to reset. We witnessed the ways in which people were falling through the cracks… In the coming months, we will need to come to these problems with dedication, compassion, and ingenuity.”