Deputy Prime Minister and Minister of Finance Chrystia Freeland speaks about the Fiscal update during a news conference in Ottawa, Monday November 30, 2020. THE CANADIAN PRESS/Adrian Wyld

Deputy Prime Minister and Minister of Finance Chrystia Freeland speaks about the Fiscal update during a news conference in Ottawa, Monday November 30, 2020. THE CANADIAN PRESS/Adrian Wyld

VIDEO: With deficit closing in on $400 billion, Liberals detail more spending to come

The country has recovered about three-quarters of the three million jobs lost during spring lockdowns

The federal Liberals are proposing $25 billion in new spending to help Canadian businesses and workers make it through a COVID-19 winter and vowing tens of billions more to help the country recover once the pandemic passes.

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.

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

There is also money for long-term care facilities and the stock of the nation’s personal protective equipment, while dropping federal sales tax on face masks and shields.

Finance Minister Chrystia Freeland’s update makes clear the measures will be removed once the economy improves, although the timing is tied to the path of the pandemic.

The cost to date has the federal deficit reaching $381.6 billion this year, but the government’s math says it could close in on $400 billion if widespread lockdowns return in the coming weeks.

Freeland’s update largely adds cash to existing programs, but tees up work already underway to craft a spring budget. She said it will focus on an economic recovery that will include a three-year stimulus plan worth up to $100 billion, depending on the twin paths of the economy and the pandemic.

“If it’s pre-committed and locked in, the risk is you overstimulate the economy, whereas this seems more that if things go the other way, there’s more to come, which will support growth,” said RBC chief economist Craig Wright.

While the details have yet to be worked out, Freeland said the stimulus plan will include time-limited spending on things like a green economy bio-manufacturing — the industry that makes vaccines and medication.

Freeland argued some of the down-payments on that plan are in Monday’s update, including proposed grants for homeowners to make energy-efficiency upgrades.

Perrin Beatty, president of the Canadian Chamber of Commerce said the economic statement provides some short-term help, but it still “presents a plan to create a plan” for recovery.

There is no specific “fiscal anchor,” a measurement to moor government spending to keep it from drifting off target, guiding the plan. In its place are economic indicators like the unemployment rate and hours worked that the Liberals will use to decide when spending can ease off or when the taps need to be opened wider.

“As we build our growth plan, and as we deploy it, the measure we’re going to be looking at to see if we’ve got the job done is really around jobs,” Freeland told reporters.

Rebekah Young, director of fiscal and provincial economics with Scotiabank, said the scant details about long-term plans will likely create unease in financial markets.

“The creation of vaguely defined guardrails with no real line of sight on the end of stimulus spending, let alone its composition, has arguably added more uncertainties to the fiscal outlook rather than less,” she said.

READ MORE: Statistics Canada says economy grew at a record pace in third quarter of 2020

The country has recovered about three-quarters of the three million jobs lost during spring lockdowns. The Finance Department estimates the unprecedented spending to date prevented a further loss of about 1.2 million jobs.

The document Monday updates the accounting on many programs, showing under-spending on some that the Liberals now want to top up, such as the wage-subsidy program that is now supposed to cost over $83.5 billion.

A revamped commercial rent-relief program will cost $2.18 billion this fiscal year. The two programs are, combined, estimated to cost about $16.2 billion next year.

Dan Kelly, president of the Canadian Federation of Independent Business, noted the changes to business aid will help small businesses plan for an uncertain foreseeable future.

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

Spending next year on extra child benefits will send $1,200 tax-free to families with net incomes up to $120,000, and $600 for families that make more than that.

The cost will be about $2.4 billion, a little more than the $2 billion for extra Canada Child Benefit payments this year, bringing the total cost for the program next year to $27.9 billion.

And while the document includes money for long-term care facilities, there is no specific bump planned in health transfers for the provinces. 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 last year.

To pay for some of it, the Liberals are proposing to make digital companies like Netflix and Airbnb collect and remit sales tax on their products.

Jordan Press, The Canadian Press


Like us on Facebook and follow us on Twitter.

Want to support local journalism during the pandemic? Make a donation here.

CoronaviruseconomyLiberals

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

People skate on a lake in a city park in Montreal, Sunday, January 10, 2021. THE CANADIAN PRESS/Graham Hughes
The end of hugs: How COVID-19 has changed daily life a year after Canada’s 1st case

Today marks the one year anniversary of COVID-19 landing in Canada

Nechako Figure Skating Club Canskate members Aubrie Sholer (from left), Renee Janzen, Alina Borno, Presley Stuckless, Sophia Reid and Layla Whittaker skate during a recent practice at the Vanderhoof Arena. (Photo submitted)
Nechako Figure Skating Club awarded local sport relief funds

“It will definitely help us recover from this and help us go on for another year.”

Wet’suwet’en supporters and Coastal GasLink opponents continue to protest outside the B.C. Legislature in Victoria, B.C., on Thursday, February 27, 2020. THE CANADIAN PRESS/Chad Hipolito
‘We’re still in it’: Wet’suwet’en push forward on rights recognition

The 670-km Coastal GasLink pipeline was approved by B.C. and 20 elected First Nations councils on its path

A health-care worker prepares a dose of the Pfizer-BioNTech COVID-19 vaccine at a UHN COVID-19 vaccine clinic January 7, 2021. THE CANADIAN PRESS/Nathan Denette
Employers might be able to require COVID-19 vaccination from employees: B.C. lawyer

‘An employer must make the case’ using expert science, explains lawyer David Mardiros

New three-storey seniors housing complex being builton the corner of Church Avenue and Victoria Street in Vanderhoof. (Aman Parhar/Omineca Express)
Housing availability a top priority for district: mayor

In Vanderhoof, 146 properties sold in 2020 worth $42.7 million

Crews with Discovery Channel film as an Aggressive Towing driver moves a Grumman S2F Tracker aircraft around a 90-degree turn from its compound and onto the road on Saturday, Jan. 23, 2021. It was the “most difficult” part of the move for the airplane, one organizer said. (Jenna Hauck/ Chilliwack Progress)
VIDEO: Vintage military plane gets towed from Chilliwack to Greater Victoria

Grumman CP-121 Tracker’s eventual home the British Columbia Aviation Museum on Vancouver Island

Rolling seven-day average of cases by B.C. health authority to Jan. 21. Fraser Health in purple, Vancouver Coastal red, Interior Health orange, Northern Health green and Vancouver Island blue. (B.C. Centre for Disease Control)
2nd COVID vaccine doses on hold as B.C. delivery delayed again

New COVID-19 cases slowing in Fraser Health region

Provincial health officer Dr. Bonnie Henry talk about the next steps in B.C.’s COVID-19 Immunization Plan during a press conference at Legislature in Victoria, B.C., on Friday, January 22, 2021. Two more cases of the COVID-19 strain first identified in South Africa have been diagnosed in British Columbia, bringing the total to three as of Jan. 16.THE CANADIAN PRESS/Chad Hipolito
B.C. now has three cases of South African COVID-19 variant, six of U.K. strain

Both variants are thought to spread faster than earlier strains

Rodney and Ekaterina Baker in an undated photo from social media. The couple has been ticketed and charged under the Yukon’s <em>Civil Emergency Measures Act</em> for breaking isolation requirements in order to sneak into a vaccine clinic and receive Moderna vaccine doses in Beaver Creek. (Facebook/Submitted)
Great Canadian Gaming CEO resigns after being accused of sneaking into Yukon for vaccine

Rod Baker and Ekaterina Baker were charged with two CEMA violations each

Police discovered a makeshift nightclub in a Vancouver apartment on Jan. 23, 2021, and say it wasn’t the first time this month officers have been called to the unit over social gathering concerns. (Phil McLachlan - Capital News)
Doorman of makeshift ‘booze-can’ in Vancouver apartment fined; police look to court order

This marks the fourth complaint about social gatherings inside the apartment in January

A Kelowna couple welcomed their Nooner baby in December. (Flytographer)
Kelowna couple welcomes baby girl from Hotel Zed Nooner campaign

Nicole and Alex will now have 18 years of free stays at the hotel

Kyrell Sopotyk was drafted by the Kamloops Blazers in 2016 and played two seasons with the Western Hockey League club. (Photograph By ALLEN DOUGLAS/KTW)
Kamloops Blazer paralyzed in snowboarding accident sparks fundraiser for family

As of Jan. 24, more than $68,000 had been raised to help Kamloops Blazers’ forward Kyrell Sopotyk

(Pixhere photo)
B.C. dentists argue for COVID-19 vaccine priority after ‘disappointing’ exclusion from plan

Vaccines are essential for dentists as patients cannot wear masks during treatment, argues BCDA

The fine for changing lanes or merging over a solid line costs drivers $109 and two penalty points in B.C. (Screenshot via Google Street View)
B.C. drivers caught crossing, merging over solid white lines face hefty fine

Ticket for $109, two penalty points issued under Motor Vehicle Act for crossing solid lines

Most Read