Update on Federal Economic and Fiscal Snapshot

Jul 8, 2020

The Federal Government today, released an economic and fiscal snapshot. You can find the full report here. The projected deficit for 2020-21 is expected to rise to $343.2 billion from the $34.4 billion deficit projected before the pandemic.

The Finance Minister Bill Morneau, also made mention of the $14B Safe Restart Agreement with the provinces which will look at investments to child care to make it more accessible; as well as increased funding for testing and tracing of COVID-19 to get people back to work safely.  While the Minister noted the economic recovery will be long and uncertain, he stated the need to invest in an economy that is green, diverse and creates opportunities for underrepresented groups.

Between February and April, 5.5 million Canadians either lost their jobs or saw their work hours significantly reduced.  Those losses pushed the unemployment rate to 13.7 per cent in May — the highest rise on record — from a pre-crisis low of 5.5 per cent in January.

The Government also details the costs and applicants around the economic recovery plan for COVID-19 including the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Response Benefit (CERB). The total estimated impact of CEWS will be $82.3 billion. That is an increase from the $45 billion estimate provided by the government last month and reflects the proposed extension and broadening of eligibility for the program. The CERB has provided over $53 billion in benefit payments to 8.16 million Canadians. That amount is expected to rise to $80 billion based on the eight-week extension and significant take-up of the program.

We will continue to keep you updated as we move forward.