The parliamentary budget office says the federal deficit for the year is on track to hit $328.5 billion as a result of COVID-19 and the “permanent impact” it is having on the economy.
That figure released this morning reflects measures announced as of the start of the month, including an estimated $225.9 billion in emergency aid in response to the pandemic.
Relative to the size of the economy, the deficit amounts to 15 per cent of gross domestic product, making it the largest over 50-plus years of comparable data.
The Liberals said in July that the deficit would be $343.2 billion, but that didn’t include new possible spending, or measures coming in under budget.
Much of the spending is expected to be temporary as the government tries to put a financial floor under households and businesses feeling economic pressure from the pandemic.
Budget officer Yves Giroux says in his report that the budget deficit will fall to about $73.8 billion next year and continue to fall in ensuing fiscal years.
But in a nod to how dramatically the government’s fiscal position has changed, his report estimates deficits roughly $40 billion larger each year, on average, compared to the outlook the office provided pre-pandemic.