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

Prince George Cougars triumph over the Langley-based Vancouver Giants Monday night, by the score of 4-1. That follows a similar defeat on Saturday by the same team. (Cougar’s Allen Douglas/Special to Black Press Media)
Vancouver Giants fall in 4-1 loss to Prince George

WHL hockey team goes up against Victoria in Kamloops on Thursday

COVID-19 virus (file photo).
COVID cases recorded at 5 Langley schools

14 schools remain on Fraser Health exposure list

Trinity Western University’s Student Association organized a celebration parade for graduating students Saturday, April 10, 2021. (Trinity Western University/Special to the Langley Advance Times)
University student association hosts grad parade at Langley campus

Students honoured with special Saturday event

Seven-year-old Aaliyah Rosa was found dead in an apartment in Langley in July, 2018. (Langley Advance Times files)
Judge to rule on final witness in Langley child murder trial

The trial of KerryAnn Lewis has lasted far longer than expected

Basmodi protest on Saturday, April 10 at Aldergrove Community Secondary School. (Special to The Star)
‘Basmodi Wave’ protesters in support of Indian farmers demonstrate at Aldergrove school

200 pairs of shoes were on display, one for every protester killed in India

Restaurant patrons enjoy the weather on a patio in Vancouver, B.C., Monday, April 5, 2021. The province has restricted indoor dining at all restaurants in B.C. due to a spike in COVID-19 numbers. THE CANADIAN PRESS/Jonathan Hayward
B.C.’s COVID-19 indoor dining, drinking ban extending into May

Restaurant association says patio rules to be clarified

In a 2019 photograph, Yin Yin Din held a picture of her brother Kyaw Naing Din, 54, and her late father Hla Din who passed away in 2014, during a trip to Victoria. (The News files)
Family of B.C. man killed by cop appeals to Attorney General for help

The Din family want B.C. Attorney General David Eby to forward their case to Crown

B.C. Premier John Horgan speaks at the B.C. legislature. (B.C. government)
Tougher COVID-19 restrictions in B.C., including travel, still ‘on the table’: Horgan

John Horgan says travel restrictions will be discussed Wednesday by the provincial cabinet

Protesters occupied a road leading to Fairy Creek Watershed near Port Renfrew. (Submitted photo)
B.C. First Nation says logging activist interference not welcome at Fairy Creek

Vancouver Island’s Pacheedaht concerned about increasing polarization over forestry activities

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Flow Academy is not accepting membership applications from anybody who has received a dose of the vaccine, according to a password-protected membership application form. (Submitted image)
B.C. martial arts gym refusing patrons who have been vaccinated, wear masks

Interior Health has already issued a ticket to Flow Academy for non-compliance with public health orders

Of 46 arrests made between March 16 and 19 at Metrotown mall in Burnaby, 27 suspected shoplifters are now facing charges. (Twitter/Burnaby RCMP)
RCMP arrest 46 people in 4 days during Metrotown shoplifting crackdown

$4,800 in stolen merchandise was recovered and returned to businesses inside of the mall

Kao Macaulay has been charged in relation to a home break-in on March 30 in Abbotsford in which five kittens were stolen. (Facebook photo)
‘Prolific offender’ charged with theft of 5 newborn kittens in Abbotsford

Kao Macaulay, 23, is accused of breaking into home on March 30

Sheila Malcolmson, B.C.’s minister of mental health and addictions (Screen shot)
Minister of mental health tells Surrey audience COVID-19 ‘has made everything worse’

More than 23,000 people in B.C. are receiving medication to treat opioid addiction

Most Read