OTTAWA — The federal deficit is expected to reach $250 billion in 2021, the largest on record, as the Liberal government introduces massive new spending measures to combat the economic fallout from COVID-19.
An updated report on federal finances by the Parliamentary Budget Office estimates that the 2021 deficit will be roughly 12.7 per cent of Canadian GDP, the highest deficit relative to the economy since 1985, when it was at eight per cent.
Federal debt as a percentage of GDP could now reach 48 per cent in 2021, up from around 30 per cent over the last number of years.
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