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Liberals to unveil 'economic snapshot' in wake of record spending on COVID-19 measures

Last Updated Jul 8, 2020 at 11:59 am PDT

Minister of Finance Bill Morneau rises during a meeting of the Special Committee on the COVID-19 Pandemic in the House of Commons on Parliament Hill in Ottawa, on Wednesday, June 17, 2020. THE CANADIAN PRESS/Justin Tang
Summary

The federal government is releasing its economic snapshot on Wednesday

The outlook is expected to give Canadians a better sense of where the economy stands in the COVID-19 pandemic

Economic snapshot is expected to include a massive deficit, experts say

OTTAWA (NEWS 1130) – We’re set to get a snapshot of how Canada’s economy is doing, four months after COVID-19 started to force businesses to close and put millions of people out of work.

The Trudeau government will be laying out the federal government’s economic snapshot on Wednesday, which will include projections for the next few months.

The snapshot is expected to reveal where the country stands, how we stack up to other nations, and how the rest of the year could look. It’ll simply lay out the numbers, with a government source telling 1310 NEWS there will be no announcements of new programs, changes to existing programs, or any tax changes. It will not include a five-year forecast, which is traditionally part of a federal budget.

With Ottawa losing revenue all while spending a record amount on federal assistance to help Canadians, experts are predicting a record federal deficit of between $250 billion to $300 billion for this fiscal year.

Some are expecting a cautiously optimistic outlook.

“There’s light at the end of the tunnel, but it’s a very long tunnel,” Ian Lee with the Sprott School of Business says, adding he’ll be looking for hints as to how the government plans to pull back from its massive assistance programs.

“When we turn it off, where’s the exit strategy?” Lee asks.

The opposition is split on how to move forward in this pandemic, with the Conservatives saying they want a phase out strategy to get people back to work.

Conservative critic Dan Albas says the snapshot likely won’t go far enough.

“It also needs to get the clear picture of what’s happening on the revenue, not just the expenditure side,” he says.

Meanwhile, the NDP wants to see how the Liberals plans to reshape benefit programs so Canadians continue to be supported. NDP Finance Critic Peter Julian wants to expand programs and tax the wealthy.

“So that we can preserve and enhance services that all Canadians need,” Julian says.

The economic snapshot comes after the Liberals delayed the March budget indefinitely due to the health crisis. Some suggest there may be some positive signs toward a recovery, however, the projections could be thrown off if Canada sees a bad second wave and provinces return to lockdown.

As the economy struggles in the wake of shutdowns, the Bank of Canada has said it believes we’ve avoided a worst-case scenario (economically) due to the health crisis, but the year isn’t done yet.

-With files from The Canadian Press