Canada to add to record deficit in pandemic recovery attempt
TORONTO (AP) — Canadian Prime Minister Justin Trudeau’s government vowed Monday to spend billions more to help the country recover from the pandemic.
Deputy Prime Minister and Finance Minister Chrystia Freeland said the country is facing its most severe challenge since World War II, the worst economic shock since the Great Depression and the worse health crisis since the Spanish flu over a century ago.
The cost to date has the federal deficit reaching a record $381.6 billion Canadian (US$294 billion) this year, but the government said it could close in on $400 billion Canadian (US$308 billion) if widespread lockdowns return in the coming weeks. Toronto, Canada’s largest city, is on lockdown.
The government’s fall economic update proposes to send extra child-benefit payments to families next year. The government is proposing $25 billion Canadian (US$19 billion) in new spending. Freeland said Canada entered the pandemic in the strongest fiscal position of any G7 country.
“We can afford the investment,” Freeland said in Parliament. “Federal debt servicing costs relative to the size of our economy remain at a 100-year low and we are locking in those low costs.”
The government wants to bring the wage subsidy back to 75% of business payroll costs. Businesses who have seen a 30% percentage decrease in revenue have been eligible in the past. The government will also extend a business rent subsidy to mid-March.
Freeland said the measures will be removed once the economy improves, although the timing is tied to the path of the pandemic.
Freeland said Canada has recovered 80% of the 3 million jobs lost at the outset of the pandemic in Canada.
“Compare to that the United States which has recovered just over half,” Freeland said.
But Trudeau has come under criticism from opposition parties this month for saying Canadians won’t be among the first to the vaccine. He said Canada will have to wait for a vaccine because the first ones are likely to be given to citizens of the countries they are made in. He noted the United States, the United Kingdom and Germany have mass vaccine-production facilities but Canada does not.
Freeland didn’t mention when Canada will get its first doses but said there will be eventually be plenty for Canadians.
“Canada has the most expansive portfolio of vaccines in the world. Ten doses for every Canadian,” Freeland said.
Opposition Conservative leader Erin O’Toole said Canadians want details on when they will get a vaccine and how it will be distributed.
“Where is the plan?” O’Toole said.
“Canadians would, in the midst of a second wave, rather have one dose in the next month than the largest portfolio 18 months from now.”