In a long-awaited economic statement, tabled today, Finance Minister Chrystia Freeland said the government’s immediate priority is to do “whatever it takes” to help Canadians and businesses stay safe and solvent.
The Liberal government is reportedly preparing to spend as much as $100 billion to kick-start the post-pandemic economy as it announced a record-high deficit of more than $381 billion in the fiscal year.
The short-term stimulus package is valued at $70 billion to $100 billion over roughly three years. The government says the stimulus spending — intended to build a greener, more inclusive, more innovative and competitive economy — will launch after a vaccine is distributed and life begins to return to normal.
“When the virus is under control and our economy is ready for new growth, we will deploy an ambitious stimulus package to jump-start our recovery,” Freeland said in a statement read in the House of Commons today.
“Spending roughly three to four percent of GDP, over three years, our government will make carefully judged, targeted and meaningful investments to create jobs and boost growth.”
Freeland said the stimulus program will help guard against long-term damage to the economy. She said government debt is highly affordable now, due to Canada’s strong past economic performance and low-interest rates.
Freeland said the government will track progress by tracking the employment rate and total hours worked to determine when to end the stimulus package spending.
During this time, the government plans to support “transformative initiatives”, such as Canada-wide early learning such as kindergarten and childcare, job training and green initiatives across Canada.
Today’s economic statement promises a $1 billion fund to help provinces and territories improve COVID-19 infection control in nursing homes.
Knowing that the pandemic has left many middle-class families in trouble, the government is also proposing a temporary 2021 grant of up to $ 1,200 per child under six in low-income families. and average Canadian Child Benefit (CCB) eligibility.
Freeland said the government is laying the foundations for a system of child care and preschool education across Canada, and that next year’s federal budget will have more details.
Currently, the government promises $20 million over five years – starting next year with an annual allocation of $ 4.3 million to the federal secretariat for preschool education and child care.
The government is also proposing to spend $70 million over five years, starting next year, and $15 million per year to support the federal Indigenous early learning and child care secretariat.
Today’s fiscal update forecasts the deficit will reach $381.6 billion by the end of March 2021 and could rise even further depending on factors such as the severity of the overall shutdown and the rate of COVID-19 infections.
This is up from the $343 billion deficit predicted in the July fiscal report. The government says it expects the deficit to fall to $ 121.2 billion in 2021-22, to $ 50 billion by 2022-23, and to $ 24.9 billion by 2025-26.
Economic statement offers help to struggling students, promising to reduce debt by eliminating interest on the federal portion of Canadian student loans and apprentice loans of Canada next fiscal year.
The government also promised $ 1.5 billion to speed up the process of lifting the drinking water quality warning in First Nations indigenous communities.
Since there are so many Canadians currently working from home, Revenue Canada will allow “modest cost” Canadians to have a tax deduction of up to $400 for working from home without their expenses must be recorded in detail.
The federal government will begin to apply GST / HST to short-term rentals based on digital platforms in July 2021. Companies like Airbnb and other vacation rental sites will be affected. The move is expected to raise $360 million in new revenue over five years.
The federal government says it will also take steps next year to implement a tax targeting units owned by non-Canada residents.
The Liberal Government has not released the full budget since March 2019, before the last election.
Conservative party leader Erin O’Toole called the statement today a “stealth budget” and accused the government of “burning money to hide its incompetence”.
He called the government’s response to the pandemic “erratic and confused.”
O’Toole said it is impossible to have a plan to rebuild the economy until there is a solid plan to buy vaccines.
“Our government had the duty to learn from its errors in the first wave, but instead of that, it failed to provide vaccines for Canadians at the same time as our allies,” he said.
The Conservative Party has criticized the government’s efforts to secure rapid testing and vaccines, accusing the Liberals of leaving Canadians behind the fence of vaccinations.
That claim was countered by the head of a US biotech company developing one of the most promising COVID-19 vaccine candidates. Noubar Afeyan, co-founder and chairman of Moderna, told CBC political reporter Rosemary Barton that Canada is not far behind other countries in terms of taking their vaccine doses.
Federal director of the Federation of Canadian Taxpayers Aaron Wudrick said Canada’s debt would reach $1 trillion within a few weeks; he calls it a “sad historic milestone.” He said the government must present a credible plan to control spending in next year’s federal budget.
The economic statement also offers to provide aid to industries most severely affected by the pandemic – such as tourism, arts and culture and aviation in the region – by offering low-interest loans. amount to $1 million through a program called “credit available to severely impacted areas.”
NDP leader Jagmeet Singh said the Liberal plan helps those who are profiting in a pandemic and failing to get help most, including smaller businesses.
“We see a Liberal government that is not willing to ask the wealthiest to pay their fair share. They have not really taken any concrete steps to look at revenue sources from the pandemic profiteers, the excess profits made during this pandemic, nor a tax on wealth,” he said.
“They’re, in fact, not even willing to put in place any real tax measure on the web giants, those who are making massive, if not record profits off the backs of people in our country, [who] continue to pay virtually no tax in our country.”
This content is also available in: Tiếng Việt