OTTAWA – Canadians will get an idea today of what the COVID-19 pandemic could mean for Canada’s economy and the federal government’s balance sheet, with the release of a new report from the parliamentary budget officer.
Yves Giroux is planning to post on his website this morning a “scenario analysis” that is intended to help parliamentarians gauge the potential economic and fiscal implications from the combined health crisis and the collapse of oil prices.
Such analyses typically involve a variety of projected outcomes based on a number of possible, alternative scenarios.
The federal government has already poured $107 billion into fighting the pandemic – $52 billion in financial assistance to individuals and businesses and $55 billion in deferred taxes – and billions more are expected to flow in the days to come.
Indeed, Prime Minister Justin Trudeau is expecting to announce more support today for businesses and entrepreneurs.
A fiscal update issued by Finance Minister Bill Morneau in December showed the Liberal government on track to run a deficit of $26.6 billion in the current fiscal year, which ends on March 30, and $28.1 billion next year.
But those projections have been blown up by the pandemic, which has coincided with a price war between Russia and Saudi Arabia that has driven already-depressed oil prices into the cellar and the economy in oil-producing Alberta into the ditch.
Canada’s economy had been sluggish before the pandemic but Morneau was still predicting modest growth. Now, economists are predicting a global recession as countries shut down non-essential businesses and lock down their citizens.
On Wednesday, Morneau promised the federal help is on the way within hours or days for the energy sector.
The federal government is also looking at help for other sectors particularly hard hit by the pandemic, such as tourism and airlines.