February 9, 2025
COVID-19: Federal deficit projected to reach $184B as economic response rolled out
Ottawa has unveiled pricey new spending measures to combat the economic fallout from COVID-19.
Ottawa has unveiled pricey new spending measures to combat the economic fallout from COVID-19.

OTTAWA — The 2021 federal deficit is now expected to reach $184 billion, or 8.5 per cent of GDP, as Ottawa unveils pricey new spending measures to combat the economic fallout from COVID-19.

The latest deficit projection, posted by the Parliamentary Budget Officer on Thursday, is more than triple the previous deficit record set by former prime minister Stephen Harper, who ran a $56-billion gap in 2009 to fend off economic recession.

The updated forecast comes after Ottawa unveiled plans for a $73-billion wage subsidy program for Canadian businesses, an initiative which continued to face criticism on Thursday for its delayed rollout.

The ballooning budget shortfall will nudge the federal debt-to-GDP ratio above 40 per cent, according to the PBO — the highest in 20 years. That figure remains below the record-high 66.6 per cent of 1996, which led to several years of fiscal austerity measures.

Before the pandemic spread, Canada’s net debt-to-GDP ratio was around 30 per cent, and the Liberals had repeatedly claimed they would continue to drive that figure down, as a way to prove their fiscal prudence. In his 2019 fiscal update, however, Finance Minister Bill Morneau posted a 2020 deficit that was $7 billion higher than expected, which in turn pushed the national debt ratio slightly higher.

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See Also:

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(2) No offence Dr. Tam, but Canadians need a second opinion

(3) Don’t panic at the surge in Canadian gun sales

(4) Job numbers are shocking but the worst is yet to come

(5) More than one million job losses in March: StatCan