Canada Rolls Out Stimulus Plan Amid Punishing COVID-19 Third Wave

• Canada’s budget deficit is forecast to hit C$154.7Bn ($123.7Bn) in the fiscal year ending next March, as Ottawa spends heavily to counter the third wave of COVID-19 infections and plans to bolster the economic recovery, the finance department said on Monday
• The deficit is 27.6% higher than the C$121.2Bn forecast in a fiscal update last November. Ottawa unveiled a C$101.4Bn plan with spending commitments spread over three years and said it would extend COVID-19 benefits as well as bringing in a childcare program and tackling climate change. The spending, aimed at boosting economic growth, is also likely to appeal to voters ahead of an expected election later this year.
• The government said the 2020/21 deficit was now expected to be C$354.2Bn, down from a previous forecast of C$381.6Bn. It forecasts far narrower deficits of C$59.7Bn in 2022/23 and C$51.0Bn in 2023/24.
• The federal debt-to-GDP ratio is forecast to peak at 51.2% in 2021-22, down slightly from 52.6% seen in November, the highest since 1999, before declining to 50.7% and 50.6% in the subsequent two years.

(Source: Reuters)