Government's fiscal update plans for more spending to help economy rebound

Marco Green
December 1, 2020

"And we have a plan to build our economy back in the spring".

O'Toole says, "We need to get this country working again".

In Monday's fiscal update Freeland projects that the deficit will reach $381.6 billion by the end of March 2021 and could climb higher, depending on the rate of COVID-19 infections.

According to a summary of the statement, shown on the official Government of Canada website, 80 per cent of jobs lost at the start of the pandemic have been recovered, thanks in part to government initiatives to help families and small businesses.

Vaccine procurement, help for the tourism sector and an nearly $400-billion deficit are among the highlights of federal Finance Minister Chrystia Freeland's fall economic statement, delivered Monday.

"Still, it is disappointing that government has not announced further fixes for new businesses and self-employed Canadians, who remain ineligible for almost all of the key support programs", he said.

"We are very much a global outlier and are ostensibly stuck at Stage Zero on the government planning process", McNaney - whose industry group represents Air Canada, WestJet, Transat and Jazz Aviation - said in a phone interview.

O'Toole said the government has been late every step of the way during the pandemic.

All the wage. For businesses, the government wants to bring the wage subsidy back to 75 per cent of company payroll costs and extend the business rent subsidy to mid-March.

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.

A $100-billion stimulus. The government plans to spend between $70 billion and $100 billion over the next three years to stimulate the economic recovery from COVID-19.

Freeland is also using the fall update to respond to calls from numerous political critics and interest groups with funds for parents of young children, aid for hard-hit sectors like tourism and entertainment, and another $1 billion to help provinces with the long-term care homes that have left our oldest citizens tragically vulnerable to COVID-19.

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.

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. Prime Minister Justin Trudeau said last month that about 95 advisories had been lifted since the party came to power in 2015, but more than 60 remained the last time figures were updated before the pandemic. The program will have to be developed with provincial governments, but the Liberals pledged money for training programs for early childhood educators. Freeland declined to cite specific numbers or targets, but said employment will be their guide. The government says GST/HST will apply to all companies that provide digital services - which means Netflixand Airbnb would charge sales tax on subscriptions and reservations north of the border.

The Canadian Chamber of Commerce welcomed the program, saying the business community had called for resources to be directed at sectors most at risk of seeing permanent closures. It will impose an additional tax on web giants starting 2022, ahead of plans from the Organization for Economic Co-operation and Development for a unified approach across developed nations. 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. "Actually revenue-based taxes that they make off of Canadians in Canada?" he asked Kapelos.

Singh said, despite the record spending, he sees the government talking more about reducing supports than increasing them and that is not a direction he can support.

"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".

Other reports by Click Lancashire

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