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Unprecedented federal deficits sustainable in short term, say economists, but ‘exit ramp,’ post-pandemic planning needed now
By Mike Lapointe, Neil Moss May 4, 2020
'It's not yet clear' what the post-pandemic economy will look like, says economics professor Kevin Milligan. 'We don't know what will be left standing when this is done,' says economist Armine Yalnizyan.
Minister of Finance Bill Morneau, pictured on March 18, 2020, at a press conference on the Hill. The PBO estimates that in the current fiscal year, the federal government will have a deficit of $252.1-billion, with program expenses totalling nearly $510-billion, and budgetary revenues dropping to $280.8-billion.
The Hill Times photograph by Andrew Meade
With an anticipated federal deficit of more than $250-billion this year, the largest projected budgetary deficit on record, some economists say that emergency spending at this level may be sustainable in the short-term, but there is likely more spending to come—and that it’s still too early to judge the future state of the economy now while the COVID-19 pandemic rolls on.
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