OTTAWA—No budget. No problem.

Set to blow past its now-irrelevant budget day next week, the Liberal government is blasting out billions of dollars from federal coffers and now says there is no limit to what it will spend to defend against the devastation of COVID-19.

Just two days after Parliament passed a massive pandemic rescue package, Prime Minister Justin Trudeau stepped outside Rideau Cottage to announce another huge tranche of money for small and medium businesses.

All told, Ottawa’s pandemic response now includes an expected $52 billion in direct aid to individuals and businesses, plus another $85 billion in deferred tax payments over the coming months.

Grand total: $137 billion — and that doesn’t account for Ottawa’s new offer to cover as much as 75 per cent of wage costs for small and medium businesses, up from 10 per cent on offer just days ago. Nor does it include $65 billion in loans backed by Ottawa that the government plans to deliver to businesses through Crown lending agencies and commercial banks in the coming weeks.

And Trudeau said there is more to come “very soon” for vulnerable individuals, while Finance Minister Bill Morneau confirmed federal aid is in the works for Canada’s aviation and energy sectors hit hard by the economic collapse surrounding the pandemic.

“We’ve not put a cap on what we might need to invest to solve this problem, to make sure that we protect Canadians,” Morneau said Friday.

“We’ve got literally millions of people who are worried about whether they’re going to have the money to support their families in the coming weeks, that is first priority and that’s where we’re going to continue to place our focus.

“We’re going to do whatever it takes to support people.”

Speaking earlier outside his residence near Rideau Hall, Trudeau said the government is pumping money into the economy at “unprecedented” levels, but that the spending is “necessary” to help individuals make ends meet and businesses survive the required period of strict health measures to slow the spread of the deadly virus.

And while the government is no longer tabling a budget for 2020 on Monday — as scheduled before the pandemic spiralled into a global crisis — Trudeau promised there will be “accountability” for a federal rescue package that is already worth more than a third of total government spending in the 2019 budget.

“We will … be engaging regularly with members of the Opposition, with the finance committee and ensuring people are seeing exactly what we’re doing,” Trudeau said, pointing to requirements in legislation rushed through Parliament this week that gives his government the extraordinary power to borrow “any amount” and spend “all money” deemed necessary to confront the pandemic over the next six months.

“We know that transparency around the investments we’re making to support Canadians is important not just from a democratic and parliamentary principle, but it’s also important in terms of giving confidence to Canadians that this government will be there for them while they do what is necessary to keep themselves, their families, their neighbours safe and ensure we can come out of this stronger than ever before,” Trudeau said.

The government’s spending blitz will soon confront a national economy that — according to several different projections — is tumbling into a deep decline.

Earlier Friday, the independent Parliamentary Budget Officer presented an “illustrative scenario” that showed Canada’s real gross domestic product (GDP) could contract by more than five per cent this year — the largest decline since 1963. By this summer, the national unemployment rate could soar to 15 per cent, the office reported, and the federal deficit for the 2020-21 fiscal year is expected to balloon from almost $27 billion to more than $112 billion. That would be the biggest budgetary hole, as a share of national GDP, since 1993, the office said.

Canadian Manufacturers and Exporters, a national organization representing more than 2,500 businesses, also published a report on Friday that painted a bleak picture of what’s to come. It concluded manufacturing output is on pace for its worst year since the 2008 financial collapse, with an expected drop of 5.7 per cent in 2020 due to an “unprecedented drop in demand” in the face of the global pandemic.

Others predicted similarly precipitous impacts. The Conference Board of Canada projects GDP to contract this year by 1 per cent, with 330,000 jobs lost amidst the pandemic. And the Canadian Centre for Policy Alternatives reported this week that 2 million Canadian workers have been laid off or face “immediate risk” of losing their jobs because of health measures imposed to stop the virus.

The federal government received almost a million claims for jobless benefits between March 16 and 22 alone.

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To help ease the economic pain of the pandemic, Canada’s central bank said Friday that it also needs to respond to the crisis and once again slashed its key overnight interest rate by 50 basis points on Friday — a move designed to make it cheaper to borrow money. The rate now sits at 0.25 per cent, down from 1.75 per cent barely three weeks earlier.

At the same time, Bank of Canada Governor Stephen Poloz said the bank will embark on a multibillion spending spree to buy government-issued bonds — a rarely-used monetary practice known as quantitative easing. This is meant to increase the supply of money in the economy and make it cheaper to take out loans.

Like the government’s willingness to spend without any limit to address the crisis, Poloz said “there is no theoretical limit” to how much money it will push into the economy by purchasing government debt until the economic recovery is “well underway.

“No firefighter ever got criticized for using too much water,” he said.

Earlier this week, MPs recalled Parliament to pass the Liberal minority government’s COVID-19 response legislation. That included a new Canada Emergency Response Benefit that will deliver $2,000 per month over the next four months to people who stop getting paid because of the virus.

The package also included wage subsidies for small- and medium-sized businesses for up 10 per cent of their labour costs, with a limit of $25,000 per business.

But under pressure from opposition parties and business groups across the country, the federal government jacked up measure and will now offer to cover up to 75 per cent of businesses’ wage costs.

Morneau said the government will work through the details over the weekend, including which businesses will be eligible and whether there will be a cap on the subsidy each firm can receive.

The government also unveiled a new program worth $25 billion, in which Ottawa will back loans to smaller businesses through commercial banks worth up to $40,000. These will be interest-free for one year, and businesses that can pay them back by the end of 2022 will have 25 per cent of the loan forgiven, the government said.

“With these new measures our hope is that employers who have been pushed toward laying off people because of COVID-19 will think again, and for those of you who have already had to lay off workers, we hope you will consider rehiring them given this payroll support,” Trudeau said Friday.

“Canadians are counting on you and I am counting on you to come back strong from this, no matter what comes next.”

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