Direct cash COVID support from Ottawa has now reached $145 Billion dollars which represents more than 8 percent of Gross Domestic Product. Put another way, the $145 Billion is a 40 percent increase over the total 2019 budget for Canada.
As high as these debt numbers are, –eight percent of GDP, the deficits are not on the scale of the Second World War, when military production and defence spending pushed the annual deficit to 23 per cent of GDP in 1943. A comparable deficit in 2020 would be nearly $500-billion.
We are not nearly as indebted, either. Mr. Morneau forecast the debt at 31 per cent of GDP in 2020-21, and though it will end up much higher now, it would take a Second World War-level deficit to bring the national debt up to the 60-per-cent-plus levels of the 1990s, before then-finance minister Paul Martin instituted sweeping federal spending reforms. The debt will be nowhere near the 109-per-cent debt carried at the end of the Second World War.