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By Paul Vieira

OTTAWA--Canada will present an economic update next Monday, which Finance Minister Chrystia Freeland said would begin the task of rolling out how the Liberal government plans to rebuild the economy in a post-pandemic world.

She will also unveil revised numbers outlining the budget deficit and debt for the current fiscal year -- both of which will set records based on Canada's aggressive response to minimize economic damage from the coronavirus. Immediate economic fortunes appear grim, with forecasters now anticipating no growth or a decline in output in the final three months of 2020 because of a second wave of Covid-19 infections.

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. Ms. Freeland has repeatedly said fiscal spending would remain aggressive until the economy makes a full recovery, which the Bank of Canada doesn't expect until 2023.

"Our government has prioritized a response to Covid-19" to help households and businesses, she told legislators as she revealed the economic update's release date. The update will help chart a path toward rebuilding "a post-pandemic economy that is robust, inclusive and sustainable."

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.

Meanwhile, the Canadian government debt is expected to surpass the C$1 trillion mark this fiscal year, or 50% of GDP.

Canada's economy is expected to record annualized growth of roughly 45% in the third quarter, with official figures due Dec. 1. That marks a sharp rebound following a nearly 39% plunge in the second quarter.

Some forecasting firms, however, have 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.

Canada has recorded exponential growth in Covid-19 cases this fall, with the seven- and 14-day averages at 4,900 and 4,700, respectively, both nearly double from a month ago and well above the peaks reached in April.

Fitch Ratings moved in June to strip Canada of its triple-A rating, citing a steep rise in the country's total government debt -- which incorporates all levels of government -- from 88% last year to an estimated 115% in 2020. Last week, Moody's Investors Service reaffirmed its triple-A rating for Canada, arguing recent history suggests authorities will impose limits on debt growth once the pandemic subsides.

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

November 23, 2020 16:49 ET (21:49 GMT)