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Biggest Deficit in History Bound for Canada, Watchdog Says

  • Parliamentary Budget Officer forecasts 2020 GDP to plunge 12%
  • As a share of GDP, budget gap will likely reach 48%: PBO
Justin Trudeau speaks outside his residence in Ottawa on April 29, 2020.

Justin Trudeau speaks outside his residence in Ottawa on April 29, 2020.

Photographer: David Kawai/Bloomberg

Canada’s budget deficit will mushroom to C$252.1 billion ($181 billion) in 2020-21 on Covid-19 spending and plummeting oil prices, according to estimates from the Parliamentary Budget Officer.

The shortfall will widen to 12.7% of gross domestic product in the fiscal year that began April 1, from C$24.9 billion, or 1.1% of output, in 2019-20, the PBO estimates. That would be the largest deficit on record when measured as a share of the economy since at least the mid-1960s, according to the PBO.