However, in the current context, uncertainty is magnified to unprecedented levels. “We need a longer-term fiscal plan and forward guidance from the government. VideoGrassroots sports get ready for lockdown release. When the pandemic first hit in January, the Bank of Canada has set its prime interest rate — which effectively acts as a guide for the rates given to consumers at their regular banks — at 1.75 per cent. The government did indicate it would expand the wage-subsidy programme, which helps employers top-up wages for workers who have had their hours reduced. But even if the worst may have passed, that doesn’t mean the outlook is positive for businesses that will have to continue to find ways to adapt in difficult circumstances, the document warned. At the same time, Finance Minister Bill Morneau provided no indication of a roadmap for when or how the government plans to rein in spending. “We will have more to say on that in the very near term as we finalize those details as how it can be used to help us get back to work,” Finance Minister Bill Morneau said in a press conference on Wednesday when asked about the extension. Whether the economy begins to slowly recover or whether it contracts again due to another shutdown, officials said, comes down to public health and whether Canadians stop the spread. As well, 1.2 million who had previously claimed the benefit stopped doing so in May as lockdown measures began to ease. More than 18,000 people have tried to enter Canada from the U.S. despite travel restrictions © 2020 Global News, a division of Corus Entertainment Inc. $343-billion deficit projected for 2020-2021 fiscal year, WATCH: $343-billion deficit projected for 2020-2021 fiscal year – Jul 8, 2020, The flood of federal spending in response to the, Liberal’s fiscal snapshot predicts a $343B deficit, B.C. In order to pay for the increased spending, the government expects to take on $1.2tr in debt, up from about C$768bn. The cost to date has the federal deficit reaching a record $381.6 billion Canadian (US$294 billion) this year, but the government said it could close in on $400 billion Canadian (US$308 billion) if widespread lockdowns return in the coming weeks. Senior economist Royce Mendes compares the current crisis to previous recessions, and suggests that this year’s projected deficit may not lead to higher taxes or cuts to government services in the near term. He described the financial outlook in the snapshot as “dire.”. Perrin Beatty, CEO of the Canadian Chamber of Commerce, also cautioned the government in response to the fiscal snapshot that Canadian businesses need clear guidance now. What the snapshot does make clear is that there is a very real likelihood that the Canadian economy and consumer habits may not soon — if ever — return to what they were pre-COVID-19, and that the level of further spending required to spur recovery will depend on how seriously Canadians continue working to flatten the curve. Links to COVID-19 (coronavirus) information for Canadians including current situation, statistics, financial support, your health, travel, immigration, safety and awareness resources. Canada is projecting a $343bn ($241bn, £200bn) deficit - more than a 1000% increase - for the upcoming fiscal year. The last time the country had its credit rating downgraded was in 1995, from Moody's Investors Service Inc. At the time, Canada's debt-to-GDP was at about 66% - the highest in the G7 - and interest rates were high. Last autumn, Finance Minister Bill Morneau projected the deficit for the upcoming year would be C$28.1bn - up from a deficit of C$14bn two years ago, before Mr Trudeau's Liberal Party won a second mandate. READ MORE: 2nd coronavirus wave could have ‘serious impact’ on economy: Bank of Canada. “Every single country on the planet will be desperately competing for the same opportunities and the same investments so where is the prime minister sending us?” he said. Nadhim Zahawi said No 10 was hoping to have eight different Covid jabs available by the autumn. The projections were released Wednesday as part of the government's fiscal "snapshot", in lieu of a budget. Canada’s Covid-19 Response Is to Spend Heavily and Ignore the Deficit—for Now Canada’s fiscal position has deteriorated the quickest among its G … While national unemployment was at a record low of 5.5 per cent in January, the coronavirus crisis and the nationwide shutdown led to an unemployment rate of 13.7 per cent in May and a total of 30 per cent of the workforce either losing hours or unemployed. Canada backs $75bn coronavirus relief bill, Over-70s could get booster Covid jab from September. Sahir Khan, executive vice-president of the University of Ottawa’s Institute of Fiscal Studies and Democracy, said to a certain extent, he did not expect much in the way of concrete numbers from the government given the “unprecedented times.”. A CBC News tally of deaths stood at 22,790. Read about our approach to external linking. However, in the current context, uncertainty is magnified to unprecedented levels. The BBC is not responsible for the content of external sites. iPlayer, 'World faces worst recession since Great Depression'. “Even without resurgence of uncontrolled transmission, global uncertainty is likely to remain for some time. Want to discuss? “, [ Sign up for our Health IQ newsletter for the latest coronavirus updates ]. set to pass 3,000 COVID-19 cases – Jul 8, 2020, The economic impact of the coronavirus, explained, The economic impact of the coronavirus, explained – Mar 6, 2020, Fiscal Snapshot: NDP says update gives opportunity to have wealthy ‘bear the brunt’ of pandemic, Fiscal Snapshot: NDP says update gives opportunity to have wealthy ‘bear the brunt’ of pandemic – Jul 8, 2020, Hong Kong residents transfer billions to Canada as China clamps down, Satellite images show how one ship stuck in Suez Canal is causing so much disruption, Fiscal Snapshot: Conservative MP says Morneau could not ‘utter’ $343 billion deficit, Fiscal Snapshot: Conservative MP says Morneau could not ‘utter’ $343 billion deficit – Jul 8, 2020, Parliamentary Budget Officer Yves Giroux had said in June that the cost of those programs, Fiscal Snapshot: Morneau details how COVID-19 benefits have helped Canadians, businesses, Fiscal Snapshot: Morneau details how COVID-19 benefits have helped Canadians, businesses – Jul 8, 2020, Fiscal Snapshot: Scheer says Morneau gave no plan to support reopening, Fiscal Snapshot: Scheer says Morneau gave no plan to support reopening – Jul 8, 2020, City of Edmonton operating in ‘new and stark’ fiscal reality: Iveson, City of Edmonton operating in ‘new and stark’ fiscal reality: Iveson – Jul 8, 2020, Feds approve shorter quarantine period for NHL players entering Canada: sources, Canada adds over 5K new COVID-19 cases again as officials warn of further spikes, Hopes and memes rest on ‘tiny’ excavator digging out Suez Canal ship, Dentists seeing ‘mask mouth’ and stress-related issues during COVID-19 pandemic, Judge rejects fashion mogul Peter Nygard’s bid to be released from jail, Ontario reports more than 2,100 new COVID-19 cases, 12 deaths, Huge container ship gets stuck in Suez Canal, blocking all traffic, Massive cargo ship stuck in Suez Canal continues to harm global shipping, New Inuit art centre opens at Winnipeg Art Gallery, Friends of woman found murdered in Burnaby park last week in shock and disbelief, Health Matters: Pandemic dental issues & Edmonton COVID-19 vaccine heading to clinical trials, B.C. “The prime minister has absolutely no plan … spending billions of dollars does not create economic growth.”, READ MORE: WHO says ‘evidence emerging’ that coronavirus may be airborne. The numbers show the deficit could be closer to $400 billion if widespread COVID-19 lockdowns return. The COVID-19 crisis hit Canada in March, but, after passing legislation in April, it wasn’t until May that the government of Canada was able to send the first Canada … Almost 6 million Canadians are out of work, or a third of the workforce, and the government expects the unemployment rate to stay at about 10% for the rest of the year, Mr Morneau said. Parliamentary Budget Officer Yves Giroux had said in June that the cost of those programs would create a deficit of roughly $256 billion this fiscal year alone. From Love Island to Nan's kitchen... iPlayerFrom Love Island to Nan's kitchen... Up close and personal with top players. Among those measures was the wage subsidy and the Canada Emergency Response Benefit, a $2,000 per month benefit for Canadians earning less than $1,000 per month because of the economic shutdown. Here are 3 possible scenarios. The government also said in the snapshot that it will extend the wage subsidy for an unspecified amount of time beyond the most recent extension to Aug. 29. Deficit could hit $4.3 trillion and over 20% of GDP The Federal deficit was on track to be over $1 trillion without any additional spending for the coronavirus this fiscal year. He said while he thinks there are many Canadians who are pleased with the government support provided so far, the time is coming when the bill will have to be paid. The government has been pumping money into the economy since March, to mitigate the effects of the pandemic. “For better or for worse, I think we are looking at the federal government as the resource that can restart this economy because I think we don’t have anywhere else to turn.”. Khan added that the financial strain on many provinces and municipalities adds to the focus on the federal government and puts further emphasis on their role in guiding any recovery. Home-schooling around the world: How have we coped? 'If the steelworks shuts it will destroy Rotherham', 'Why can't we sing in Welsh and be successful? Read about our approach to external linking. About a third of the workforce is unemployed, and the economy is expected to shrink by almost 7% this year. How to watch and listen from the comfort of your own home, Front line insight into the police's battle with organised crime, Biden condemns 'atrocity' of Georgia voting law1, Over-70s could get booster Covid jab from September2, 'Over-70s autumn booster' and shops 'open till 10'3, Riot police clear protesters from city centre5, Tories warn of post-Corbyn Labour 'bounce'6, Belarus banned from Eurovision over song lyrics7, Wales becomes first UK nation to lift travel ban8, Watchdog warns against naming prophet row teacher9, Met investigates 'Everyone's Invited' abuse claims10, Duped by social media scammers. The flood of federal spending in response to the coronavirus pandemic and the ensuing economic crisis will see the deficit soar to $343 billion this year, as officials warn the economy might never go back to normal. In Ottawa, the Parliamentary Budget Officer said the federal deficit could hit $252.1-billion, about 12.7 per cent of GDP, this year. It has already paid out about $80bn in individual emergency economic relief, and intends to spend a total of $82.3bn on the wage subsidy programme in the coming year. The coronavirus pandemic is proving them right, and pointing to a precarious road ahead for the nation’s finances. “Whatever number you put out, it’s going to be wrong no matter what,” he said. The Parliamentary Budget Officer recently released an updated analysis of the coronavirus pandemic’s impact on the Canadian economy …
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