Canada to Present Fall Economic Update on Nov. 30
November 23 2020 - 04:01PM
Dow Jones News
By Paul Vieira
OTTAWA--Canada will present an economic update next Monday, with
the country's gross domestic product now at risk of shrinking again
in the final three months of 2020 because of exponential growth in
Covid-19 cases.
Deputy Prime Minister and Finance Minister Chrystia Freeland
told lawmakers Monday the update, an annual tradition, will begin
to set out how the Liberal government plans to rebuild the economy
in the post-pandemic period "that is robust, inclusive and
sustainable."
To date, Canada's fiscal package has totaled roughly 325 billion
Canadian dollars, or the equivalent of $250 billion. Those outlays
represent 17% of Canada's GDP, and additional spending is in the
works, including a revised rent subsidy for businesses and an
extension of existing programs.
Canada's heavy dose of virus-fighting stimulus is having
repercussions. Its fiscal position is deteriorating at the fastest
pace among the Group of 20 industrialized countries, based on data
from the International Monetary Fund. The Canadian government said
in July it projected a budget deficit in the current fiscal year,
ending March 30, 2021, to swell to C$343.2 billion or 15% of GDP,
versus a deficit accounting for 1.5% of GDP in the previous
12-month period.
That budget deficit figure could be revised higher in the
update.
Canada's economy is expected to record annualized growth of
roughly 45% in the third quarter, with official figures due Dec. 1.
Some forecasting firms, however, have now scaled back expectations
for the fourth quarter in part because of a second wave of Covid-19
infections that has forced authorities across the country to impose
lockdowns affecting roughly 11% of the population -- including the
city of Toronto, Canada's largest.
BMO Capital Markets, for instance, said it now expects no growth
in the fourth quarter, versus its earlier estimate of 2.3%
expansion.
Write to Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
November 23, 2020 15:46 ET (20:46 GMT)
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