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July 2020 Economic and Fiscal Snapshot

08/07/2020


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.

Parliament

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.