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Canada’s deficit to hit $330B as coronavirus lands ‘permanent’ economic impact

Click to play video '55% of Canadians say federal deficit too large: Ipsos poll' 55% of Canadians say federal deficit too large: Ipsos poll
Ipsos polling exclusively for Global News revealed that 55 per cent of Canadians polled say the federal deficit is too large, even in the wake of COVID-19 spending. Also, 54 per cent of Canadians would support an election this fall. Global News spoke with Ipsos Public Affairs CEO Darrell Bricker for an analysis of the results.

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.

READ MORE: Canada’s current deficit level will be ‘unsustainable’ within 1 to 2 years: PBO

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.

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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.

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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.

Click to play video 'Parliamentary budget officer says Canada’s deficit ‘unsustainable’' Parliamentary budget officer says Canada’s deficit ‘unsustainable’
Parliamentary budget officer says Canada’s deficit ‘unsustainable’