On Wednesday, the Independent Parliamentary Budget Officer of Canada, the 10th-largest economy across the globe by nominal GDP (Gross Domestic Product) and the 16th-largest by PPP (Purchasing Power Parity), said in a statement that the North American nation’s budget deficit for fiscal year 2020-21 would likely to balloon to C$256 billion or $188 billion, largely due to the havoc-scale Government spending aimed at cushioning the blow of the pandemic’s financial fallouts.
In point of fact, although the data released from Canada’s Independent Parliamentary Budget Officer said that the fiscal 2020-21 budget deficit of Canada would likely to inflate to as many as $188 billion as beforementioned, marking up the nation’s largest deficit since the World War II, compared to a deficit of C$21.8 billion recorded on last fiscal year, The Globe and Mail had quoted two of the senior Government officials as saying that the fiscal 2020-21 budget deficit could climb up to C$300 billion.
Canada seeks to issue long-term bonds amid lower rates
Meanwhile, as the Northern American nation’s public debt would likely to hit $17.4 billion in fiscal 2020-21 starting on April 1, as a broad-based restructuring move as part of the nation’s uphill battle to resume an upward spiral, Canada had been brewing off an option to issue longer-term bonds in order to take advantage of low interest rates, a Government source said earlier on Wednesday.
Aside from that, ahead of a “fiscal snapshot” from the Canadian Finance Minister Bill Morneau on Wednesday that would likely to outline the growth expectations and the status of current balance sheet, adding that the remarkably low interest rate could make longer-term bonds a lucrative centrepiece behind the nation’s rise from the pandemic-induced financial slump, Canadian PM Justine Trudeau said earlier on the day, “This is not and has not been a time for tightening belts and austerity.
Historically low interest rates mean manageable borrowing costs as we continue to invest in Canadians and the economy. ”