OTTAWA (Reuters) - The Canadian government will not raise taxes at this time to help pay for costly coronavirus aid programs, Finance Minister Bill Morneau told CTV on Thursday.
The Liberal government has so far unveiled measures worth more than C$160 billion ($117.7 billion) in direct spending, or around 7% of gross domestic product.
Analysts predict the budget deficit for the 2020/21 fiscal year is set to exceed C$250 billion, smashing previous records.
Asked whether a tax hike was on the table, Morneau said: “No, it’s not on the table ... and the reason for that is at a time when we’re seeing the economy that’s gone down so precipitously the last thing we would want to do would be to raise taxes.”
Morneau is due to unveil a fiscal and economic snapshot on July 8 to show much money the government has spent combating the coronavirus outbreak.
“We actually need to think about how we get our economy back up and running so it’s ... increasing demand, so that (a tax cut) would be the opposite of what we’d want to do at this time,” he told the television network.
Reporting by David Ljunggren; Editing by Sandra Maler and Peter Cooney