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

Prime Minister Justin Trudeau will issue an apology for Canada’s treatment of Itaian-Canadians during the Second World War. (CPAC)
COLUMN: Apologizing for an uncomfortable wartime decision

Canada’s government will apologize for its treatment of Italian-Canadians during the Second World War

Kimberley case counts not at the point for 18 years and older community vaccination, says Interior Health. (File photo)
Many factors considered for smaller community-wide vaccination: Interior Health

East Kootenay resort town’s COVID-19 situation not at the point of community-wide vaccination, say officials

The BC Wildfire Service is urging caution amid forecasts of strong winds throughout the Kamloops Fire Centre. (BC Wildfire Service photo)
Strong winds forecasted for Kamloops Fire Centre, BC Wildfire service urges caution

“Wind can cause grass fires to spread very quickly,” says the BC Wildfire Service

Richard Cannings
Penticton MP weighs in on federal budget

Budget caters to the wealthy, but Richard Cannings is happy with $10/day childcare

Are you considering any ambitious home renovation projects? The Okanagan Regional Library can help. (Black Press file photo)
COLUMN: Redecorate your home with help from the library

Plenty of resources in place for home decoration projects

Canadian Prime Minister Justin Trudeau and United States President Joe Biden smile as they say farewell following a virtual joint statement in Ottawa, Tuesday, February 23, 2021. THE CANADIAN PRESS/Adrian Wyld
Trudeau pledges to cut emissions by 40% to 45% by 2030, short of U.S. goal

Trudeau announced target during a virtual climate summit convened by U.S. President Joe Biden

Vernon RCMP are seeking the public’s help in identifying a man who allegedly pointed a firearm at two people outside a downtown business Saturday, April 10, 2021. (Contributed)
Man who brandished firearm in downtown Vernon sought by police

Video surveillance image shows man pointing what investigators believe to be a handgun April 10

MLA Shirley Bond, right, answers questions during a press conference at Legislature in Victoria, B.C., on February 19, 2019. THE CANADIAN PRESS/Chad Hipolito
Former B.C. gaming minister says she wasn’t told directly about dirty cash flowing to casinos

Shirley Bond said Thursday civil forfeiture, gang violence and gambling addiction were also major concerns in 2011

RauDZ pop-up patio located on Pandosy Street in front of The Okanagan Table. (Contributed: Audrey Surrao)
Kelowna restaurant gets creative to adjust to new health orders

The owners of RauDZ Regional Table open ‘pop-up patio’ to adjust to health order banning indoor dining

RCMP Constable Etsell speaks to tourists leaving the area at a police roadblock on Westside Road south of Fintry, B.C., Thursday, July 23, 2009. THE CANADIAN PRESS/ Yvonne Berg
B.C. police say they take ‘exception’ to conducting roadblocks limiting travel

Asking the police to enforce roadblocks exposes officers to further risk and possible COVID-19 infections, says federation president Brian Sauve

The City of Vernon has placed 30th in Macleans.ca’s poll of the 415 best communities to live in Canada. (Jennifer Smith - Morning Star)
Okanagan city high on Macleans’ list of best places to live in Canada

Vernon ranked No. 30, fifth-highest in province and best ranking outside Vancouver Island; Halifax No. 1

Waterfront owners on Kalamalka Lake might want to check their docks, as one was spotted floating around the Oyama end of the lake Thursday, April 22. (Nick Clements photo)
‘Anyone lose a dock?’ in North Okanagan

Wooden structure spotted at south end of Kalamalka Lake

As part of the province’s strategy to combat the opioid overdose crisis, take-home naloxone kits have been distributed throughout the province. (Courtesy of Gaëlle Nicolussi)
Vancouver Island could be at its worst point of overdose crises yet: medical health officer

Island Health issued overdose advisories for Victoria, various communities in the last two weeks

BC Hydro released a survey Thursday, April 22. It found that many British Columbians are unintentionally contributing to climate change with their yard maintenance choices. (Pixabay)
Spend a lot of time doing yard work? It might be contributing to climate change

Recent BC Hydro survey finds 60% of homeowners still use gas-powered lawnmowers and yard equipment

Most Read