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.
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.