Canadian Finance Minister Bill Morneau has tabled a fiscal snapshot that shows the government's deficit is expected to hit C$343 billion this year, largely attributed to COVID-19 pandemic-related support programs that have pushed federal spending to a level not seen since the Second World War, the media reported.
The 168-page snapshot tabled on Wednesday offers a short-term economic analysis and a detailed account of what the government has spent already to shore up an economy on life support, reports CBC News.
It however, presents little in the way of a long-term plan to return the economy to pre-pandemic normalcy.
"Some will criticize us on the cost of action," Morneau said in a speech in the House of Commons on Wednesday.
"But our government knew that the cost of inaction would've been far greater.
"Those who would have us do less ignore that, without government action, millions of jobs would have been lost, putting the burden of debt onto families and jeopardizing Canada's resilience," the Minister added.
The government has rolled out programs in recent months like the Canada emergency relief benefit (CERB) to help the sick and unemployed during the pandemic and the Canada emergency wage subsidy (CEWS) to help businesses keep employees on the payroll amid massive shifts in sales and revenue.
The government also has created the Canada emergency business account (CEBA) to float partly forgivable loans to businesses in need, and has set aside some C$9 billion to help students.
The elderly have received one-time Old Age Security bonuses and families eligible for the Canada Child Benefit got an extra C$2 billion in payouts in May, said the CBC News report.
The government estimates that these programs, and dozens of others, have resulted in $236 billion in new spending to date.
But the government is projecting that, by the end of the 2020-21 fiscal year next March, it will have spent about C$469 billion more than planned when it last set spending targets in December 2019.
Beyond new spending, the deficit has been pushed higher by a significant dip in the amount of revenue that Canada is expected to collect this year.
Personal income taxes alone are projected to dip by some 30 per cent and corporate taxes will be roughly 11 per cent lower.
The mounting deficit has also pushed the government's total debt level to more than C$1 trillion a number never before seen in Canada.
The projected debt will be C$1.2 trillion by March 2021, up from C$765 billion a year earlier.
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