The government of Prime Minister Justin Trudeau will next week unveil the impact of emergency Covid-19 spending on Canada’s finances.
Finance Minister Chrystia Freeland will release new deficit projections on November 30 as part of a broader budget update. The economic statement could also include details of new permanent spending on long-term priorities including childcare.
Canada is facing its deepest budget deficit since World War II after Trudeau unveiled massive emergency spending on income supports in response to the global pandemic. In July, the federal government projected a $343-billion ($262.2-billion U.S.) shortfall for the current fiscal year, or 16% of Canada’s total economic output.
The government has since announced an additional $40 billion in spending, and Freeland has rejected calls for restraint until the pandemic subsides. Last week, Moody’s Investors Service reaffirmed Canada’s "Aaa" credit rating, citing economic strength and "policy effectiveness" that make it resilient to shocks such as Covid-19.
