Federal Government Announces Funding of $19 Billion for Safe Restart of Economies in the Provinces and Territories

On Thursday afternoon, Prime Minister Justin Trudeau announced that the federal government, provincial and territorial governments have reached a deal if $19 billion in funding to help reopen economies across Canada amid the COVID-19 pandemic.

The newly announced funding will focus on several priority areas, such as enhanced COVID-19 testing and contact tracing, the purchase of personal protective equipment (PPE) for front line workers, funding for municipalities for transit, as well as a national sick leave plan and child care services so that parents can return to work. 

Elsewhere, the funding would also support lower-tier governments with their needs such as bailing out cities whose expenses have soared while revenues plunged, improving the state of long-term care, and to fund mental health services and tackle homelessness. 

Speaking during a press conference from Parliament Hill, Prime Minister Justin Trudeau stated that the pandemic was much more than a health crisis, saying there were deep economic impacts as well. 

“COVID-19 isn’t just a health crisis. It’s an economic crisis, too,” said the Prime Minister.

“When we talk about the recovery phase, it’s not just about making sure we can detect, control and prevent future outbreaks. It’s also about helping people, businesses and entire communities adjust to our new normal.”

The deal comes weeks after several negotiations took place between the federal government and the premiers of the provinces and territories. 

Deputy Prime Minister Chrystia Freeland led the negotiations as the federal government wanted specific amounts confirmed for certain priorities, while the provinces wanted fewer strings attached to the funding. 

While Prime Minister Justin Trudeau previously pledged $14 billion to the provinces and territories, many premiers have said that amount was not nearly enough to cover their needs.

A report from the Canadian Federation of Municipalities said that in April 2020, some cities are facing a $10 to $15 billion shortfall due to the loss of revenue from property taxes, utility charges and transit fees amid the COVID-19 pandemic. 

Canada’s largest city, Toronto has recently reported that it is facing a $1.35 billion deficit this year, while Montreal reported they are facing a shortfall of $500 million. 

Elsewhere in Canada, Halifax has reported that it expects a deficit of $85.4 million this year due to the COVID-19 pandemic.

The Prime Minister had said in his press conference today that the federal government understands there may be a need for more funding beyond the next six to eight months however his government will continue to work with the provinces and territories as they restart their economies and gradually begin to reopen businesses. 

“We will continue to work hand in glove with the provinces and territories to make sure that, every step of the way, Canadians are supported in both their health needs but also the relaunching of the economy,” said Prime Minister Justin Trudeau.

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