Yes I do, Mr. Chair.
Good afternoon, Mr. Chair, vice-chairs and members of the committee. Thank you for the invitation to appear before you today in our first virtual appearance before this committee.
We are pleased to be here today to discuss our recent COVID-19 economic and fiscal analysis.
With me today I have Dr. Xiaoyi Yan, who is the director of budgetary analysis in my office.
Our work to date has included the publication of three scenario analysis reports on the impact of the COVID-19 pandemic and oil price shocks. Our scenario analysis reports are designed to help parliamentarians gauge the potential implications of the COVID-19 pandemic and oil price shocks on the Canadian economy and the government's finances. The analysis provides a plausible illustrative scenario. It is not a forecast. This scenario analysis is updated regularly as more data and information become available.
Our latest scenario analysis update report, which was published on April 30, incorporates new federal measures announced up to and including April 24. Our updated economic scenario assumes real GDP in Canada to decline by 12% in 2020, which would be the worst on record since the series started in 1961.
Under this scenario, the budget deficit would increase to $252 billion in 2020-21, which would make it, relative to the size of the Canadian economy, 12.7% of GDP. The federal debt-to-GDP ratio would rise to 48.4% of GDP in 2020-21. These latest fiscal results include the $146 billion in federal budgetary measures that have been announced as of April 24, based on Finance Canada and PBO cost estimates. These numbers do not take into consideration measures announced after April 24. Their inclusion would increase the federal deficit by a few billion dollars.
My office has also produced independent cost estimates of a number of the components of the government's COVID-19 economic response plan, including the Canada emergency response benefit, the Canada emergency wage subsidy and the Canada emergency business account among others. Based on our analysis, the estimated cost of the Canada emergency response benefit is $35 billion, while the Canada emergency wage subsidy is expected to cost $75 billion and the Canada emergency business account just over $9 billion.
To date, budgetary measures announced by the government are intended to be temporary. Once the budgetary measures expire and the economy recovers, the federal debt-to-GDP ratio should stabilize. However, if some of the measures are extended or made permanent, the federal debt ratio could keep rising.
Xiaoyi and I would be pleased to respond to any questions you may have regarding our COVID-19 analysis or other PBO work.
Thank you, Mr. Chair.