Loading articles...

High unemployment, $343B deficit projected in Liberals' fiscal snapshot

Last Updated Jul 8, 2020 at 1:04 pm MDT

Finance Minister Bill Morneau rises during a meeting of the Special Committee on the COVID-19 Pandemic in the House of Commons on Parliament Hill in Ottawa, on Wednesday, June 17, 2020. Mid-sized Canadian businesses that are strapped for cash because of COVID-19 can now apply through their own banks to get loans of up to $60 million from the federal government. THE CANADIAN PRESS/Justin Tang

OTTAWA – The Trudeau Liberals say they expect nearly two million Canadians to remain without jobs this year as the COVID-19 pandemic drags down the domestic economy and federal aid sends the deficit to a historic $343 billion.

The economic and fiscal “snapshot” from the government lays out the Liberals’ belief that there will be a slow return to a new normal, with unemployment high and economic growth low through to at least the end of 2021.

Even though the government believes the worst of the economic harm from the pandemic is behind the country, the document says a recovery can’t begin in earnest until an effective vaccine or treatment becomes widely available.

Things could, however, get worse under two alternative scenarios the Finance Department lays out.

Should prolonged shutdowns stay in place, or restrictions not fully rollback, a return to normal activity for households and businesses will be uneven and slower than hoped for, leading to a more pronounced drop in economic output than is already expected.

And should the country be hit with a second wave of the novel coronavirus during the annual flu season, the ensuing lockdown would cause what the Finance Department describes as a “deeper and longer-lasting negative impact on the economy.”