The parliamentary budget officer says in a new report that this year’s federal deficit could hit $256 billion due to the COVID-19 pandemic.
The result, posted in a report this morning, is the combination of an estimated total of $169 billion in federal spending on emergency aid and a historic drop in economic output.
The budget office estimates the economy could shrink by 6.8 per cent in 2020, the weakest showing since 1981 and double the record of 3.2 per cent shrinkage in 1982.
The overall deficit figure is only $3.8 billion higher than budget officer Yves Giroux’s previous predictions, which his report says is due to a better economic outlook that offsets some new spending.
Giroux stresses that the figures are the outcome of one of many possible scenarios and not a certain forecast.
The report comes one day after Prime Minister Justin Trudeau promised to deliver a “snapshot” of federal finances on July 8 that will provide short-term spending estimates.