Parliamentary Budget Officer Yves Giroux says it is “not unthinkable” that the federal debt could reach $ 1 trillion this fiscal year as the economic response to the COVID-19 pandemic continues.
Giroux made this comment at Tuesday’s finance committee meeting when Conservative MP Pierre Poilievre asked if it was “possible or realistic” for the federal debt to reach $ 1 trillion this fiscal year.
“Possible, yes. Realistic? Yes. Certainly not unthinkable,” replied Giroux.
The comment comes two weeks after Giroux also predicted that the federal deficit for the year could reach more than $ 252 billion due to the emergency economic programs the government has put in place to help Canadians cope with the loss of jobs and income during hatching, if applicable. business closures are slowly eased from summer to December and oil prices remain low.
On Tuesday, he said the figure was “optimistic”.
“The figure of $ 252 billion is most likely the very optimistic scenario, as opposed to the deficit figure for the current fiscal year,” said Giroux.
He said that the measures announced by the government are supposed to be temporary and that, once programs like the Canada Emergency Benefit and the wage subsidy expire and the economy recovers, the debt to debt ratio Canada’s GDP is expected to “stabilize”.
“However, if some of the measures are extended or made permanent, the federal debt ratio could continue to increase,” warned Giroux.
Pressured by Canada’s economic recovery plan, Prime Minister Justin Trudeau has given reporters no indication of what will be done to cure the battered economy and reduce the growing deficit.
“There will be time after all this is done while we find out exactly how it is going, where we will have to make the next decisions on the appearance of this recovery,” Trudeau told a press conference on 30 April, the day the initial $ 252- a billion dollars was released from the PBO’s office.
“But right now, our goal is to get through this together as a country.”
However, Giroux said that the government can do something now to help predict the economic damage and understand the steps that will need to be taken on the road to economic recovery. He wants the government to provide a financial update.
“The government probably has an idea in mind of how much it wants to spend on potential stimulus packages, but we don’t have that information,” said Giroux.
On May 4, when Trudeau was pressured into knowing whether the government would be delivering its budget soon, he said the government had no timetable for sharing this kind of tax information at the moment.
“We will find ways to share this with you, but we have not yet been able to determine what is the best way to review a budget or economic update or perhaps another way to share information. with Canadians on what we plan for the coming months, “said Trudeau.
However, he said that the government is open to different ways of communicating economic information to Canadians.
“Nothing is at stake,” said Trudeau.
With files from The Canadian Press