Economy

Canada to add to record deficit in pandemic recovery attempt

December 01, 2020 07:46·
Embedded Image

Embedded Image

"Our government's plan is focused on fighting this pandemic, supporting Canadians and ensuring that once the virus is defeated we can invest in growth and jobs for everyone".

"As part of its $10-billion growth plan, the CIB has earmarked $2.5 billion for clean power and is now working in collaboration with provincial and regional partners to connect Canadians to clean electricity across Canada through the Atlantic Loop and other regional projects", reads the update.

The government has spent hundreds of billions to support out-of-work Canadians and businesses that were forced to close temporarily.

The government will run a deficit of at least $381 billion, according to its estimates, but warns with a resurgence in the virus and escalated lock down measures, that number could grow to almost $400 billion.

Presenting the fiscal blueprint in the House of Commons Monday, Freeland framed the stimulus spending - worth between three and four per cent of Canada's - as "time-limited" and geared toward creating 1 million jobs to bring employment back to pre-pandemic levels and prevent "long-term economic scarring".

Canada's budget deficit is projected to balloon to a record Can$382 billion (US$284 billion) as government spending skyrockets to combat the spread of the novel coronavirus, the finance minister announced Monday.

So while the government acknowledged in the FES that many of its global peers have already announced their own green recovery plans, it has yet to produce one for Canada.

Finally, the government says it will support regional air carriers by committing $206 million over two years to regional development agencies for a new Regional Air Transportation Initiative. The government will also increase the wage subsidy to 75 per cent until March 2021.

Freeland also threw out another olive branch in Ottawa's often hard relationship with provincial premiers by promising to answer their years-long call to overhaul the fiscal stabilization fund that sends federal cash to provinces facing serious drops in revenue.

Hydrogen-powered Nikola Badger pickup canceled amid company issues
Nikola's shares were down nearly 22% in morning trading, while GM's were marginally down. Instead, GM will merely provide fuel-cell technology.

"Unlike this finance minister, I don't want the economy to crash and be rebuilt after the pandemic", O'Toole said.

To make a down payment on our recovery, support for Canadians to make their homes greener and more energy efficient, a plan to plant 2 billion trees and laying the groundwork for a Canada-wide Early Learning and Child Care System.

Details of the stimulus program of 70 billion to 100 billion Canadian dollars (54 billion to 77 billion US dollars) will be budgeted over the next three fiscal years starting from April 1, 2021. What the Liberals are proposing is to provide more money to provinces that see sudden drops in revenues through an existing fiscal-stabilization program, an increase provinces asked for past year.

The government's fall economic update proposes to send extra child-benefit payments to families next year as well as to put cash into skills training and to create new jobs.

The Liberal government had previously touted its declining debt-to-GDP ratio as evidence of its fiscal prudence, but abandoned that key fiscal anchor when the pandemic struck.

Freeland said Canada has recovered 80% of the 3 million jobs lost at the outset of the pandemic in Canada. Freeland declined to cite specific numbers or targets, but said employment will be their guide.

The government is also moving ahead with plans to charge GST and HST on digital companies like AirBnB, Netflix and Amazon. However, she did not provide the timeline that many Canadians are looking for. While the plan promises to cancel interest payments on federal student loans next year, Singh said that stops short of the NDP motion all parties backed last week to restore the moratorium on all loan repayments until May.

Meanwhile, New Democrat Leader Jagmeet Singh will hit the stage at the West Block press theatre to go over his party's "expectations" for the update, as well as emphasize their ongoing call for the government to "make the wealthy ... pay their fair share".

"They have indicated with this economic update that they are going down the path of Conservatives to cut the help to people, that is not the path we want to go".

Recommended News

Join The Conversation

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.