COVID Delivers Government a $2.4 billion Hit

$2.5 billion. That’s the government’s forecast for the provincial deficit for the current fiscal year.

Just a few months ago the provincial government was on track to deliver a surplus budget last year and then another in this fiscal year. But then, along came the Corona Virus.

With the tabling of the final version of the provincial budget in the Legislature yesterday we now know that the deficit for the coming year is going to be a little over $2.4 billion. That is just a hair higher than the Bank of Montreal was forecasting last week and among the best performances in the nation.

The pandemic – and the billions devoted to emergency support programs coupled with planned capital spending and economic initiatives to stimulate new activity – threw a wrench into the government’s plan, reducing last year’s surplus from a projected $34 million to a loss of $319 million.

Then this year’s bottom line shows a projected loss of $2.4 billion, split evenly between new spending and lost revenue of $1.2 billion resulting from job and business losses through the lockdown as well as reduced oil prices.