Federal deficit likely now at $260 billion due to COVID-19, Parliamentary Budget Officer (PBO) says

OTTAWA — Parliament’s spending watchdog says the estimated federal deficit for the year has likely risen to about $260 billion with new measures rolled out in recent weeks.

Budget officer Yves Giroux previously estimated the federal deficit at $252.1 billion this fiscal year on account of a sharp increase in spending on emergency aid and a subsequent drop in economic activity related to the COVID-19 pandemic.

Parliamentary Budget Officer Yves Giroux waits to appear before the Commons Finance committee on Parliament Hill in Ottawa on March 10, 2020. Parliament’s spending watchdog says the estimated federal deficit for the year has likely risen to about $260 billion with new spending measures rolled out in recent weeks. Budget officer Yves Giroux made the comment during an appearance before a Senate committee, which will hear from Bank of Canada governor Stephen Poloz later today. THE CANADIAN PRESS/Adrian Wyld

Speaking to a Senate committee this afternoon, Giroux says the government has added about $7.6 billion in spending since his last report, pushing the potential deficit ever deeper.

Giroux says his office will update its estimates of federal finances, including the deficit and debt, some time in June.

He also says PBO analysts are in the early stages of looking into the potential impact on federal finances from extra borrowing by Crown corporations through the pandemic.

Bank of Canada governor Stephen Poloz is scheduled to testify before the same committee later today.

This report by The Canadian Press was first published May 26, 2020.

The Canadian Press