Canadian spending hits level not seen since WW2 #121856

Canada has handled coronavirus outbreak better than US, Trudeau says

Canada handled the coronavirus outbreak better than US: Trudeau

He adds he's planning either a fiscal update or a budget for the fall.

As the Liberals prepare a "fiscal snapshot" this afternoon that will lay out how the pandemic is affecting government finances and the deficit, the prime minister defended the federal government's spending on COVID-19 relief, reiterating his belief that many Canadians needed the help. "Representing almost 14 per cent of Canada's gross domestic product (GDP), the Plan includes more than $230 billion in measures to protect the health and safety of Canadians and provide direct support to Canadians, businesses and other employers, and up to $85 billion in tax and customs duty payment deferrals to meet liquidity needs of businesses and Canadian families".

Fuelling the deficit is also an unprecedented drop in economic output and employment that will cut revenues the government expected to receive this year.

"We took on debt so Canadians didn't have to", he said. The yield on benchmark 30-year debt increased 10.8 basis points to 1.092 per cent, according to Bloomberg data, as investors reacted to the forthcoming flood of paper.

Canada has handled the coronavirus outbreak better than many of its allies, including the United States, said Justin Trudeau on Wednesday, in a rare public comment on the faltering effort to contain the pandemic in the US. The prime minister argued the economy would be in much worse shape were it not for the government's response, in part to thwart the need for households to take on more debt.

This means the COVID-19 pandemic has pushed the government's debt from $765 billion as of March 2020 to an expected $1.2 trillion by March 2021.

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"We took on debt so Canadians wouldn't have to".

The 168-page snapshot tabled on Wednesday offers a short-term economic analysis and a detailed account of what the government has spent already to shore up an economy on life support, reports CBC News.

Trudeau said historically low interest rates will make borrowing costs manageable and allow the government to continue to invest in the economy.

"We made a very specific and deliberate choice throughout this pandemic to help Canadians, to recognize that overnight people had lost their jobs", Trudeau told reporters in Ottawa.

Justin Trudeau says almost 11 million Canadians have been supported through the emergency wage subsidy or the Canada Emergency Response Benefit, and states that the government willingly took on debt to reduce the debt to Canadians themselves. "Canada's debt structure is prudent, it's spread out over the long term, and it compares well to our G-7 peers", the finance minister said.

The Liberals expect more workers to move onto the wage subsidy and off the CERB as that program winds down.

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