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Finance Minister Chrystia Freeland speaks via video link during Question Period in the House of Commons, in Ottawa, on Jan. 28, 2021.Sean Kilpatrick/The Canadian Press

The federal deficit stood at $232-billion in November, with four months left in the fiscal year, according to the Finance Department’s monthly tracking of Ottawa’s bottom line.

The deficit for the April-to-November period of the previous year, before the pandemic hit, was just $11.8-billion.

The fiscal monitor report, released Friday, shows Ottawa ran a $15.4-billion deficit in November, 2020; in the same month a year earlier, the deficit was just $2.7-billion.

The pandemic is having a dramatic impact on federal finances, with the government approving hundreds of billions of dollars in emergency spending to support workers and businesses as large swaths of the economy have been shut down for health and safety reasons.

Prior to the pandemic, the government was projecting a deficit for the 2020-21 fiscal year of $28.1-billion. Finance Minister Chrystia Freeland’s most recent forecast was the Nov. 30 economic statement, which said the deficit was projected to hit $381.6-billion. That document cautioned that more pandemic-related restrictions could increase it to almost $400-billion, and in fact further restrictions were announced in December.

The federal debt stood at $685.4-billion in 2019-20. That means a deficit this year in the range of $400-billion will push the debt above the $1-trillion mark for the first time.

Measured as a percentage of GDP, the federal debt was at 31.3 per cent in 2019-20 and is projected to peak at about 57 per cent by 2023-24, according to scenarios outlined in the government’s November update.

The government and many economists have argued that this short-term spike in the federal debt-to-GDP ratio can be managed and lowered over time, as long as the economic growth rate is higher than the rate of inflation.

The November update noted that with interest rates currently near historic lows, the cost to service the debt is actually expected to be $3-billion less this year.

Conservative MP and finance critic Pierre Poilievre challenged the government’s spending approach Thursday in the House of Commons. He criticized what he called a “fantasmic economic statement and a Speech from the Throne full of crazy ideas to re-engineer our entire economy.”

Ms. Freeland responded by defending the government’s plan.

“The best economic policy for Canada right now is a strong health policy, and that is why the government of Canada is providing strong support to Canadian workers and Canadian businesses to get through to the other side of the coronavirus,” she said. “Once we get there, we will come roaring back.”

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