Government of Canada Releases Economic and Fiscal Snapshot

The Government of Canada (Department of Finance) last week released an economic and fiscal snapshot for Canada's economy in the wake of COVID-19. They are forecasting a contraction in GDP for 2020 of 6.8% followed by growth of 5.5% in 2021. This is generally within the ranges identified by private sector forecasters. Unemployment in 2020 is expected to be about 9.8%, declining to 7.8% in 2021. They are also calling for a federal deficit in 2020-21 of $343.2 billion - about 10 times that projected deficit of $34.4 billion for 2019-20. Some $227.9 billion of the deficit will result from the government's COVID-19 Economic Response Plan. This will bring the accumulated federal debt to just over $1 trillion, or 49.1% of GDP. Full details are available here.