“I have a feeling that it is possible to address the deep deficit that the government will incur in the current fiscal year, but on condition that it lasts a year,” he said.
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“It is therefore affordable without necessarily having to increase taxes if all the programs put in place and all the large exceptional expenses are indeed temporary.
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Last month, the federal government released an “economic snapshot” that said spending flooding in response to the COVID-19 pandemic would see the country’s deficit increase to $ 343 billion this year.
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The federal government has spent billions on a number of programs, including the Canada Emergency Response Benefit (CERB) and the Canada Emergency Wage Grant (CEWS) to help Canadians who have lost their jobs or have lost their jobs. been laid off as a result of the pandemic.
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But Giroux said if the programs were extended, or if Canada saw another year with a “big, big deficit”, it would be “much more problematic.”
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“We would probably need to do something as a country to restore something more fiscally sustainable in the long run, which means cutting spending or raising taxes or a combination of both,” he said. declared.
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Additionally, Giroux said if Canada saw a second wave of the virus, the deficit would be less manageable.
In the 168-page budget snapshot, Finance Minister Bill Morneau did not indicate how or when the federal government planned to limit spending, but insisted the country remains well positioned to manage the burden of this deficit due to historically low interest. rates.
Canada’s overall debt, on the other hand, is expected to hit $ 1.2 trillion in 2020-21, according to the Budget Snapshot.
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Giroux said that while the financial snapshot provides a snapshot of how much money the government has spent and intends to spend this fiscal year, it does not indicate what the government plans to do next.
« Are they planning to stimulate the economy or are they planning to revert to more normal days at the government level, which means a more normal level of deficit or even balanced budgets? »Said Giroux. “So the government has given absolutely no indication of its plans for the future.”
He said that is why a real federal budget is so important.
« Budgets generally have a five-year horizon, ”he said. “And for now, the government’s horizon ends in March 2021, so we don’t know.
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However, the federal government has argued that due to the unprecedented and unpredictable nature of the pandemic, it would not be possible to release a full budget.
Giroux said this means that at present there is “absolutely no indication” of what the government plans to do on April 1.
” A still a big deficit or something more reasonable? Finances are back on track? We just don’t know, ”he said.
– With files from Amanda Connolly and Beatrice Britneff from Global News
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