July 2020 Economic and Fiscal Snapshot
July 2020 Economic and Fiscal Snapshot
Federal Finance Minister Bill Morneau provides details on Canada's economy and the status of COVID-related relief programs.
The Government of Canada released the much anticipated Economic and Fiscal Snapshot on July 8, 2020. This was presented as an overview of the federal response to COVID-19. The 168-page document is meant to provide an interim picture of Canada’s current economic and fiscal situation given the impacts of the COVID-19 pandemic.
Economic Forecasting
Unique to the Snapshot, as opposed to the typical economic and fiscal updates the government traditionally produces, is the difficulty in projecting into the future. It is yet unknown if the recovery will be continuous, uneven and gradual, or subject to a virus resurgence.
In light of this, the government has quantified its anticipated budgetary balance and the change from prior years is significant. Before the pandemic, the federal government projected the 2020 deficit to be $34.4 billion. In the Snapshot, Canadians learned the 2021 deficit is projected to be $343.2 billion.
Supporting Canadians Directly
The Government of Canada’s guiding philosophy is clearly seen in how it has committed the nearly $230 billion of COVID-related spending. Fundamentally, the government is supporting Canadians directly, which is most evident through the two hallmarks of the suite of COVID-19 emergency programs, the Canada Emergency Response Benefit (CERB) and Canada Emergency Wage Subsidy (CEWS) programs.
The following table outlines the projected costs of various COVID-19 response programs:
| COVID-19 Emergency Response Program Impact Summary | (in millions of dollars) |
| Canada Emergency Response Benefit (CERB) | $80,000 |
| Canada Emergency Wage Subsidy (CEWS) | $82,300 |
| 10% Temporary Wage Subsidy for employers | $2,080 |
| Canada Emergency Student Benefit (CESB) | $5,250 |
| Canada Emergency Commercial Rent Assistance (CECRA) | $2,405 |
| Canada Emergency Business Account (CEBA) | $55,000 |
| Small and Medium-sized Enterprise Loan and Guarantee Program | $40,000 |
| Personal Income Tax Payment Deferral | $25,000 |
| Business Income Tax Payment Deferral | $30,000 |
| Sales Tax Remittances and Custom Duty Payments Deferral |
$30,000
|
COVID-19 is perhaps the most significant economic event since the Great Depression. Virtually all facets of the economy have been impacted by the pandemic in some way. As such, the Government of Canada has relied on a number of key tools that it will likely keep returning to as the country transitions from emergency response to economic recovery.
There may be more recovery programs on the horizon and changes to some existing emergency programs as they transition to recovery. As well, the government will soon announce details of the proposed extension of the CEWS program.
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