Vaccines, Tourism Support and Big Deficits Highlight Federal Economic Statement
Vaccine supplies, aid for the tourism sector and a nearly $400 billion deficit were among the highlights of federal Finance Minister Chrystia Freeland’s fall economic statement on Monday.
The federal government is promising 10 vaccines for every Canadian, spending more than $1 billion to procure COVID-19 vaccines from seven major companies.
Existing supports for those hard hit by COVID-19 will continue until at least fall 2021, such as the Canada Recovery Benefit and the enhanced Employment Insurance program.
Freeland says further economic stimulus will come “when the virus is under control,” totaling between 3 and 4% of Canada’s total gross domestic product.
“The government’s growth plan will include investments that will deliver on our commitment to create one million jobs and restore employment to pre-pandemic levels, as well as trigger some of the pre-loaded stimulus from the Canadian economy: additional savings that have accumulated in the bank accounts of Canadians. and on corporate balance sheets,” Freeland’s speech reads.
Support for the struggling tourism industry, particularly in Atlantic Canada, will come in the form of guaranteed loans.
“Our government is also creating a new stream of support for businesses that have been hardest hit by this crisis, creating a credit program with 100% government guaranteed loan support and favorable terms for businesses that have seen their income drop significantly as people stay home to fight the spread of COVID-19,” the document read.
This aid will be known as the Credit Availability Program for Highly Affected Sectors, aimed at providing low-interest guaranteed loans to businesses in the tourism and hospitality sector and the arts and entertainment sector. . The document says the government is working with the banks to establish the program and will have more details in the future.
The update referred to the Atlantic Loop, a transmission project including Atlantic Canada and Quebec, with funds coming from the Canadian Infrastructure Bank (CIB) for the project.
“As part of its $10 billion growth plan, CIB has committed $2.5 billion to clean energy and is currently working with provincial and regional partners to connect Canadians to clean electricity. across Canada through the Atlantic Loop and other regional projects,” it read. the update.
“Additionally, to further support the pre-development work needed for the project, the government is proposing to provide $25 million in 2021-22 to help select developers complete technical assessments, community engagement, and environmental and regulatory studies. .
Conservative Party of Canada Leader Erin O’Toole released a statement following Monday’s announcement, denouncing the federal government’s belated response to the COVID-19 pandemic.
“The truth is that the Liberal economic response has been erratic and confused. Millions more Canadians were put on CERB than necessary when their jobs could have been maintained if the Liberals had implemented a wage subsidy sooner,” O’Toole’s statement read.
“The Canadian economy was already showing serious signs of weakness before the pandemic hit. Ignoring our warnings, the Liberals prided themselves on running large structural deficits and raising taxes in times of economic prosperity. Now (Prime Minister) Justin Trudeau is running a historic deficit of nearly $400 billion — and still leaving millions of Canadians behind.
While the estimated $381 billion shortfall is significant, the document suggests much of the spending is temporary and in response to the pandemic.
“This is time-limited spending to prevent households from going bankrupt and businesses from laying off workers and closing down permanently. These time-limited expenditures are essential to ensure that once COVID-19 brought under control, the economy can quickly recover to pre-pandemic levels,” reads the document.
New Democratic Party MP for St. John’s East Jack Harris says he doesn’t see much of the new spending announced in the update. He says his party wanted to see the country’s wealthiest people play their part in helping the economy recover.
“There are fundamental changes that you would expect, as we have learned from the pandemic, that the most vulnerable in our society are the ones who suffer the most,” Harris said.
“There is no fundamental change that you would expect to see over the next year. We are disappointed. We don’t see any new spending or new programs. It looks like they are trying to maintain the status quo until the vaccine arrives in September. Everything else is stable as she progresses.