Vaccine procurement, help for the tourism sector and an almost $400-billion deficit are among the highlights of federal Finance Minister Chrystia Freeland’s fall economic statement, delivered Monday.
The federal government is promising 10 vaccine inoculations for every Canadian, spending more than $1 billion to procure COVID-19 vaccines from seven major companies.
Existing supports for those hit hard by COVID-19 will continue through to the fall of 2021 at least, such as the Canada Recovery Benefit and enhanced employment insurance program.
Freeland says a further economic stimulus will come “when the virus is under control,” totalling between three and four per cent of Canada’s total gross domestic product.
“The government’s growth plan will include investments that deliver on our commitment to create a million jobs and restore employment to pre-pandemic levels as well as unleash some of the Canadian economy’s pre-loaded stimulus: additional savings that have accumulated in Canadians’ bank accounts and on businesses’ balance sheets,” reads Freeland’s speech.
Support for the battered 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 the hardest hit in this crisis, creating a credit program with 100 per cent government-backed loan support and favourable terms for businesses that have seen their revenue significantly decline as people stay home to fight the spread of COVID-19,” reads the document.
That assistance will be known as the Highly Affected Sectors Credit Availability Program, aimed to offer guaranteed, low-interest loans for businesses in the tourism and hospitality sector and the arts and entertainment sector. The document states the government is working with banks to establish the program and will have more details in the future.
The update referenced the Atlantic Loop, a transmission project including Atlantic Canada and Quebec, with funds coming from the Canadian Infrastructure Bank (CIB) toward the project.
“As part of its $10-billion growth plan, the CIB has earmarked $2.5 billion for clean power and is currently working in collaboration with provincial and regional partners to connect Canadians to clean electricity across Canada through the Atlantic Loop and other regional projects,” reads the update.
“In addition, to further support necessary project predevelopment work, the government proposes to provide $25 million in 2021-22 to help some proponents complete engineering assessments, community engagement, and environmental and regulatory studies.”
Conservative Party of Canada Leader Erin O’Toole issued a statement following Monday’s announcement, decrying a late response to the COVID-19 pandemic from the federal government.
“The truth is the Liberals’ economic response has been erratic and confused. Millions more Canadians were put on the CERB than necessary when their jobs could have been maintained if the Liberals had implemented a wage subsidy earlier,” read O’Toole's statement.
“The Canadian economy was already showing serious signs of weakness before the pandemic hit. Ignoring our warnings, the Liberals took pride in running large structural deficits and raising taxes in good economic times. Now, (Prime Minister) Justin Trudeau is running a historic deficit of almost $400 billion — and still leaving millions of Canadians behind.”
While the estimated $381-billion deficit is large, the document suggests much of the spending is temporary and in reaction to the pandemic.
"This is time-limited spending to prevent households from going broke and businesses from laying off workers and permanently shutting their doors. This time-limited spending is essential to ensure that once COVID-19 is under control the economy is able to quickly recover to pre-pandemic levels,” reads the document.
St. John’s East New Democratic Party MP Jack Harris says he doesn’t see much in the way of new spending announced in the update. He says his party wanted to see the wealthiest people in the country play their role to help the economy recover.
“There’s some fundamental changes that you would expect, as we have learned from the pandemic, that the most vulnerable in our society are the ones that are hurting the most,” said Harris.
“There’s no fundamental change that you would expect to see over the next year. We’re disappointed. We don’t see any new spending or programs. It seems like they’re trying to coast along in the status quo until the vaccine comes along in September. Everything else is steady as she goes.”
