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Deputy Prime Minister and Minister of Finance Chrystia Freeland takes part in a news conference on Parliament Hill in Ottawa on Sept. 24, 2020.BLAIR GABLE/Reuters

Ottawa will attempt to square demands for COVID-19-related spending with mounting concerns over the hundreds of billions in new debt when it reveals its first full economic update since the onset of the pandemic.

New spending to help businesses and households absorb the hit of a surging second wave is expected to push the deficit past the already historic high of $343.2-billion, announced in July. And while Finance Minister Chrystia Freeland has said her government’s spending “will not be infinite,” it has yet to account for massive new government programs promised in the fall Throne Speech, including national child care and pharmacare.

The economic statement will be released on Monday after markets close. Amid a year of economic turmoil and with limited public accounting of the emergency spending, the update will be watched closely by Bay Street and political leaders alike. Conservatives are already bracing for the updated numbers, with federal Tory Leader Erin O’Toole expecting that the new deficit tally will push $400-billion.

“That is startling, and that is too high,” Mr. O’Toole said Sunday. His party supported the federal government’s major spending programs for households and businesses during the pandemic, but said other elements like the spending on students should have been rolled out differently.

However, his focus is on what the economic update will say about spending plans in the years ahead, Mr. O’Toole said, adding that he wants to see a “plan to prudence coming out of the pandemic.”

The government, though, is also under pressure from business groups, premiers and mayors for more spending, both on the immediate challenges brought on by the pandemic and for the longer term.

Ottawa is expected to unveil targeted support for the hardest-hit sectors, such as hospitality and tourism, and the premiers have asked for an increase to the health transfer – which would add billions to Ottawa’s annual spending commitments. Ontario Finance Minister Rod Phillips said the province is looking for a “signal” from the Liberals ahead of the premiers’ meeting with Prime Minister Justin Trudeau next month.

Blaine Higgs, New Brunswick’s Progressive Conservative Premier, said he is looking for the federal government to jumpstart immigration programs, which have stalled during the pandemic. And rather than creating new spending programs, Mr. Higgs said he’d like to see Ottawa give provinces more flexibility with the money they already receive in areas such as infrastructure spending.

The economic statement comes on the heels of the Liberal’s decision to prorogue Parliament and set out a new agenda with a Throne Speech. At the time, Mr. Trudeau called the pandemic an “unprecedented opportunity” to “build a more resilient Canada.” But the government’s postpandemic plans have been largely sidelined as the Public Health Agency of Canada has tracked a concerning rise in COVID-19 cases.

The minority government’s September child-care promise was met with skepticism from the NDP, which notes that they’ve heard those promises before. But at a Liberal fundraiser on Thursday, Ms. Freeland spoke at length about the need to “get it done.”

Child care and action on climate change were the priorities laid out by NDP Leader Jagmeet Singh last week. And Green Party Leader Annamie Paul said her caucus wants to see the Liberals detail a plan for a “green recovery.”

Since September, Ms. Freeland has delivered a couple of high-level speeches to business audiences in which she expressed the government’s desire to keep spending as needed to manage the pandemic and to focus on debt and deficits later. But beyond that, she has not provided many hints as to the budgeting approach she will take.

“Monday’s fall statement is Chrystia Freeland’s first big test as Finance Minister,” said Elliot Hughes, a senior adviser at Summa Strategies who previously worked as a policy adviser to Ms. Freeland’s predecessor, Mr. Morneau.

Former parliamentary budget officer Kevin Page, who leads the University of Ottawa’s Institute of Fiscal Studies and Democracy, said the sheer volume of government spending that has occurred over the past year makes Monday’s update a significant moment in terms of public accountability.

“It’s not just an update, because we haven’t had a budget in a year and a half,” he said.

Mr. Page said the Finance Minister will need to deliver a message to financial markets and bond-rating agencies that addresses concern about the growing size of the federal debt. He pointed to a recent IMF report, which showed Canada’s government deficits – which combine federal and provincial numbers – are the largest this year among advanced economies when measured as a percentage of GDP. The report also showed that Canada’s net government debt is well below comparable countries.

Mr. Page is among those who are calling for Ottawa to lay out a new fiscal anchor, a measurable target for managing federal deficits and debt.

Mr. Hughes said he expects the update will provide some initial indications of where the government is heading on those large Throne Speech pledges, such as child care. The challenge for Ms. Freeland is that those files require co-operation with the provinces at a time when relations between Ottawa and some premiers is starting to fray over issues such as COVID-19 vaccines.

“I would suspect that the federal government has had enough with free money, so to speak, and will be looking for a lot more accountability for dollars and cents going forward,” Mr. Hughes said. He added that Ottawa will likely use the update to remind the country that “a good chunk of the money that’s been spent fighting the COVID-19 pandemic” has been federal dollars.

Calls for more cash are also coming from the Federation of Canadian Municipalities. President Garth Frizzell said in an interview that city councils across the country are nervously awaiting the update. Municipalities are contending with major shortfalls in areas such as public transit, and are hoping for a boost from Ottawa. And the Canadian Medical Association, which was highly critical of the Throne Speech, said it hopes to see dollars attached to things such as the promise for national standards in long-term care.

The Globe reported last week that the focus of the update is expected to be on immediate pandemic measures.

Hassan Yussuff, president of the Canadian Labour Congress, noted that the existing terms of the Canada Emergency Wage Subsidy are up for renewal in mid-December and some Canadians may be nearing the limits of temporary enhancements to the Employment Insurance program.

He said the government should indicate that it is prepared to extend these programs.

“In the absence of that, it’s abject poverty,” he said.

While Ms. Freeland’s update will be watched closely for policy announcements, an update is primarily about providing the latest forecast for Ottawa’s bottom line.

Normally, private-sector economists have a good idea of what to expect in terms of a deficit, but not this time. Scotiabank’s chief economist Jean-François Perrault has said it could be higher than $400-billion.

CIBC chief economist Avery Shenfeld said he couldn’t even hazard a guess.

“As much as we’d like to give you our forecast for the bottom line, we can’t,” he said in a research note. “While we could take a stab at updating the last revenue projections, nobody outside the government can credibly claim to know how the spending numbers have changed.”

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