Despite massive federal deficit, Calgary businesses want continued aid
Calgary Chamber of Commerce says members under pressure, worried for future
The scale of the federal deficit announced on Wednesday caught many off guard, but some Calgary businesses just hope to see some of that spending continue.
Sandip Lalli, the president of the Calgary Chamber of Commerce, says the $343-billion deficit is troubling but not unexpected given the scope of the current challenges.
She says her members want to see subsidies and supports for businesses continue.
"We're already hearing of bankruptcies and defaults," said Lalli.
"Looking at the debt loads that these businesses are carrying, people are very concerned about making it through October to December as their bills come due."
Spending on businesses
The federal government has provided partly forgivable loans for struggling businesses and an emergency wage subsidy to help businesses keep employees on the payroll.
It's just one aspect of government spending that has sent the projected deficit soaring from a pre-COVID prediction of $34.4 billion and puts the country on target for a debt of $1.2 trillion.
Retailers across Alberta have been hit particularly hard.
The Retail Council of Canada predicts at least 15 per cent of bricks-and-mortar stores will not survive the pandemic, but the number in Alberta could actually be higher.
"Alberta retailers and restaurants face a much greater challenge," said Diane Brisebois, the council's president and chief executive officer.
She says retailers in Alberta were already hurting because of the recession and declining oil prices.
Charles St-Arnaud, the chief economist for Alberta Central, a credit union organization, says he expects low interest rates and the temporary nature of the spending programs mean the debt will gradually decline as the economy rebounds.
But he notes there was no long-term plan in Wednesday's snapshot.
"So in some ways, stimulating economic growth in the coming years will be very important because that will naturally increase the fiscal revenues," he said.
Federal revenues have fallen by $81.3 billion and the economy is expected to shrink by 6.8 per cent this year before rebounding by 5.5 per cent next year.
St-Arnaud believes the federal government will continue to spend, focused on minimizing the worst-case scenario for the national economy until the fall.
With files from Colleen Underwood and Bryan Labby