Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }
Coronavirus information
Coronavirus information
The Zero Canada Project provides resources to help you make the most of staying home.
Visit the hub

Parliamentary Budget Officer Yves Giroux is seen on Parliament Hill, in Ottawa, in a March 10, 2020, file photo.

Adrian Wyld/The Canadian Press

The Parliamentary Budget Officer said the fiscal and economic fallout of COVID-19 remains extremely uncertain, but could lead to the weakest GDP figures in decades and a deficit of more than $112.7-billion.

Parliament’s spending watchdog released a report Friday that provides an illustrative example of what could happen based on a set of economic assumptions. The report cautions that the purpose is to provide a scenario and the report is not a forecast or an assessment of what is most likely to happen.

The report assumes that current social distancing measures remain in place through August, or for six months in total.

Story continues below advertisement

In this scenario, real GDP growth would decline by 2.5 per cent in the first quarter of 2020 and then again by 25 per cent in the second quarter, using annual rates. For the year as a whole, GDP would decline by 5.1 per cent, which the PBO says would be the weakest on record since 1962.​

The PBO’s estimate of a $112.7-billion deficit in the fiscal year that starts April 1 does not include the measures announced this week following the passage of Bill C-13, the government’s emergency stimulus legislation. The PBO notes that the legislation contains “un-costed” measures.

The PBO’s estimates of GDP are generally in line with recent private sector forecasts. Also, a report this week by RBC Economics said that, including the new measures in Bill C-13, the deficit will be closer to $110-billion, compared with the $28-billion shortfall projected by the government in December.

“While additional fiscal measures will likely be required to support the economy in the coming months, the government’s balance sheet prior to these shocks was healthy,” the PBO report states. “However, even after additional support measures are provided, fiscal stimulus measures may be required to ensure that the economy reaches lift-off speed especially if consumer and business behaviour does not quickly revert back to ‘normal’ conditions.”

The report notes that in light of historically low interest rates, the government “could undertake additional significant borrowing” if required.​

Sign up for the Coronavirus Update newsletter to read the day’s essential coronavirus news, features and explainers written by Globe reporters.

In the interests of public health and safety, our coronavirus news articles are free for anyone to access. However, The Globe depends on subscription revenue to support our journalism. If you are able, please subscribe to globeandmail.com. If you are already a subscriber, thank you for your support.

Your subscription helps The Globe and Mail provide readers with critical news at a critical time. Thank you for your continued support. We also hope you will share important coronavirus news articles with your friends and family. In the interest of public health and safety, all our coronavirus news articles are free for anyone to access.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies