The fiscal snapshot provided by Finance Minister Bill Morneau included some alarming figures related to debt including a projection of this year’s deficit that is nearly 200 times larger than in 2019 ($19.8 billion.)
This year’s deficit will take the net federal debt to the $1.2 trillion mark moving the federal debt to GDP ratio to 49 per cent compared to 31 per cent in 2019.
Morneau said in his presentation that the spending was and continues to be necessary as many Canadians are still suffering immense hardships as a result of the COVID-19 pandemic.
“Some will criticize us for our spending,” Morneau said but he says most of it was required in a timely fashion which resulted in some gaps.
Conservative leader Andrew Scheer brought up some of those gaps specifically mentioning complaints from business owners who have found the rent subsidy program inadequate and a lack of support for workers in the energy sector.
“There is no plan to stimulate job growth, to attract investment, or to rebuild our economy,” Scheer said. He added that all other G7 countries have released detailed plans on their recovery strategies and he was disappointed the fiscal snapshot didn’t include more information on what the government’s future plans include.
“We know there are some things that need to change so we can get people back to work,” Morneau said
The report shows the federal government made $212 billion in direct support to Canadian businesses and citizens. Without that help the situation would have been dire according to Morneau, “Millions of jobs would have been lost, putting the burden of debt onto families and jeopardizing Canada’s resilience.”
The 168-page fiscal snapshot also provided an economic forecast for the near future.
Economists commissioned to help with the snapshot project that the size of the economy is projected to 6.8 per cent this year before growing by around 5.5 per cent next year.
Unemployment figures peaked at 14 per cent at the height of the pandemic and the snapshot projects that figure will be around 7 per cent by the end of 2021.
The report did not offer projections beyond 2021.
