The Conference Board of Canada’s Chief Economist Pedro Antunes offers the following economic insights on today’s Federal Fiscal Update:
“Minister Freeland has highlighted the importance of rolling out a vaccine and providing additional support to households and businesses through what will be a tough winter for many Canadians. The additional spending coupled with a lasting negative hit to government revenues will add copiously to the federal debt—boosting the net debt-to-GDP ratio from 35 per cent pre-COVID to around 54 per cent over the medium term. If debt financing costs remain low, the federal government can manage but there’s no doubt that the COVID-19 crisis will constrain federal finances for decades to come.”
Lasting hit to Nominal GDP
(GDP, $ billions)
Notes: Grey area denotes forecast.
Source: The Conference Board of Canada.