Economics
Trudeau’s Deficit Swells to 16% of Output on Massive Virus Aid
- Canada made ‘specific and deliberate choice’ to spend, PM says
- Government revenue plunges by most since Great Depression
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Justin Trudeau’s government said it will run a budget deficit equivalent to nearly 16% of economic output, a level not seen since World War II, in a race to safeguard Canada from its deepest recession in almost a century.
Finance Minister Bill Morneau forecast a C$343 billion ($254 billion) shortfall in a fiscal update Wednesday that detailed the full cost of the Covid-19 crisis. Direct support to individuals and businesses will total C$212 billion this year, driving spending levels to their highest since 1945. The recession has also taken a toll on revenue, which will drop as a share of the economy to the lowest since 1929.