Canada to unveil first budget in two years

OTTAWA: Canada's Minister of Finance Chrystia Freeland on Tuesday said that she would present the government's federal budget on April 19, the first in two years, with talk of early elections in the next months.

Freeland made the announcement before the House of Commons.

"Canada entered this global pandemic in a strong fiscal position which allowed our government to provide unprecedented support to Canadians," she said.

"We will continue to do whatever it takes to support Canadians and Canadian businesses."

The last budget presented by Prime Minister Justin Trudeau's administration was in March 2019. The government said it did not present the 2020 budget due to the uncertainties of the novel coronavirus pandemic.

In the 2019 budget the government projected a deficit of Can$19.8 billion for 2019-2020. But since then it has taken steps to tackle the pandemic that have increased the estimated budget deficit Can$382 billion for the current fiscal year, according to an update issued in November.

Canada is enduring its worst economic crisis since the World War II due to the effects of the pandemic.

Last week the International Monetary Fund suggested that the Canadian government should be clearer in communicating its budget goals to give assurances that it is capable of handling the debt load.

Canada is expected to grow 4.4 percent in 2021 if the pandemic is brought under control.

The pandemic caused a 5.4 percent drop in GDP in 2020, the worst result in at least 60 years, according to the IMF report.

A rejection of the budget by the deputies, in a vote of confidence, would trigger early legislative elections.

The Trudeau government, in the minority since the October 2019 election, needs the support of at least one opposition party.

Many analysts believe that Trudeau might be tempted to call for an early election in the spring, in the hope of regaining a majority.