Parliament’s budget watchdog is projecting that the federal deficit for the coming fiscal year could be $112.7 billion.
That’s a jump of $89.5 billion from previous forecasts, as government spending climbs to combat the economic fallout from COVID-19 and falling oil prices.
The report made public this morning also warns that the deficit for the current fiscal year, which closes March 31, could be $26.7 billion, which would be an increase of $5.5 billion compared to the budget officer’s November forecast.
The projected deficit for the 2020-2021 fiscal year doesn’t include extra spending the Liberals announced on Wednesday in the form of a new benefit for affected workers.
That measure pushed direct spending on the government’s economic bailout package to $52 billion from $27 billion.
Parliamentary budget officer Yves Giroux’s report also predicts that the economy will contract by 5.1 per cent this calendar year, the biggest drop since 1962.