A report Friday morning from the Parliamentary Budget Office paints a startling picture of what Canada's economic future may hold.
The report said, "the economic and fiscal outlook is extremely uncertain," and stresses it should not be considered a forecast, just one possible outcome.
In addition to the COVID-19 pandemic, it also examined the impact of diving oil prices.
In developing its report, the parliamentary budget watchdog used past events like the global fiscal meltdown in 2008. It also assumed the Organization of Petroleum Exporting Countries (OPEC) would not limit oil production, and social distancing measures would continue as long as August.
The scenario assumes the Gross Domestic Product or GDP falls 2.5 per cent in the first quarter of 2020, and by 25 per cent in the second quarter. Real GDP growth would be the weakest on record since 1962.
If the GDP falls, the federal government's tax base could drop by $218 billion in 2020 compared to projections made last November.
The country's debt-to-GDP ratio could rise to 38.1 per cent this year and next. However, the report notes it is well below the peak in 1995-96 when it hit 66.6 per cent.
Canada's unemployment rate could rise to 15 per cent in the third quarter of 2020.
The analysis takes into account the federal government's $82 billion economic stimulus package, but not any future measures that may be needed to protect the economy.
Before the pandemic and sharp drop in oil prices, the scenario points out the "government's balance sheet -- was healthy."
On a brighter note, the report said credit market access is at historically low rates, and the government "could undertake additional significant borrowing if required." The Bank of Canada announced on Friday morning that it was cutting its key interest target rate to 0.25 per cent to support the national financial system and the economy.