July 8, 2020: Federal Economic and Fiscal Snapshot 2020

July 8, 2020

Federal Finance Minister Bill Morneau delivered the Economic and Fiscal Snapshot 2020 today, providing details on the status of federal spending on the COVID-19 response, and the extent of the impact on the deficit.

To date, the fiscal costs of the government’s COVID-19 supports have amounted to $236 billion. The federal deficit for 2020-21 currently stands at $343.2 billion, compared to $28.1 billion which was forecasted by the government prior to the pandemic in the 2019 Economic and Fiscal Update. The federal debt-to-GDP ratio, which was 31% in 2019-20, is expected to rise to 49% in 2020-21. Due to the uncertain nature of the pandemic, the government did not forecast beyond this fiscal year.

The Fiscal Snapshot provides an average of private sector forecasts for key economic indicators. Canada’s real GDP growth was +1.7% in 2019, and is projected to be -6.8% for 2020 and +5.5% for 2021. The country’s unemployment rate, which was 5.7% in 2019, is forecasted to average 9.8% in 2020 and 7.8% in 2021. Inflation (Canada’s CPI), was 2.0% in 2019, and is expected to be 0.5% in 2020, before returning to 2.0% in 2021.

There were no new infrastructure spending announcements in the Fiscal Snapshot, or details about infrastructure investment over the coming months and years. The government did not provide details on any new spending related to apprenticeships or skilled trades. Last week however, Employment and Social Development Canada announced investment in supports to help apprentices complete training and find work in the skilled trades. Details of that investment are available here.

The full details of the federal Economic and Fiscal Snapshot 2020 can be found here.