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

Kent Harrison Search and Rescue brought a man to safety, and awaiting paramedics, after a 20-foot fall down an embankment on Jan. 23, 2020, on Harrison West Forest Service Road. (Kent Harrison Search and Rescue photo)
Rescue crew lifts man up 20-foot embankment near Harrison Lake

Kent Harrison Search and Rescue says this is the fifth call already this year

Police tape is shown in Toronto Tuesday, May 2, 2017. (Graeme Roy/The Canadian Press)
CRIME STOPPERS: ‘Most wanted’ for the week of Jan. 24

Crime Stoppers’ weekly list based on information provided by police investigators

A mallard duck swims through Salish Pond in Chilliwack on Saturday, Jan. 23, 2021. (Jenna Hauck/ Chilliwack Progress)
WEATHER: Snow, rain in forecast for Fraser Valley

Fraser Valley has been treated to more than a week of mostly sunny weather, but it’s about to end

sd
VIDEO: Mission drag racer scores 1st career win, sets world record, makes history in 2020

Justin Bond, founder and owner of JBS Equipment, hits milestones in break-out year

A video posted to social media by Chilliwack resident Rob Iezzi shows a teenager getting kicked in the face after being approached by three suspects on Friday, Jan. 22, 2021. (YouTube/Rob i)
VIDEO: Security cameras capture ‘just one more assault’ near Chilliwack secondary

Third high-school related assault Rob Iezzi’s cameras have captured since beginning of 2021

U.S. Senator Bernie Sanders sits in on a COVID-19 briefing with Dr. Bonnie Henry, provincial health officer, and Adrian Dix, B.C. minister of health. (Birinder Narang/Twitter)
PHOTOS: Bernie Sanders visits B.C. landmarks through the magic of photo editing

Residents jump on viral trend of photoshopping U.S. senator into images

A woman injects herself with crack cocaine at a supervised consumption site Friday, Jan. 22, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Drug users at greater risk of dying as services scale back in second wave of COVID-19

It pins the blame largely on a lack of supports, a corrupted drug supply

Wet’suwet’en supporters and Coastal GasLink opponents continue to protest outside the B.C. Legislature in Victoria, B.C., on Thursday, February 27, 2020. THE CANADIAN PRESS/Chad Hipolito
‘We’re still in it’: Wet’suwet’en push forward on rights recognition

The 670-km Coastal GasLink pipeline was approved by B.C. and 20 elected First Nations councils on its path

Jennifer Cochrane, a Public Health Nurse with Prairie Mountain Health in Virden, administers the COVID-19 vaccine to Robert Farquhar with Westman Regional Laboratory, during the first day of immunizations at the Brandon COVID-19 vaccination supersite in Brandon, Man., on Monday, January 18, 2021. THE CANADIAN PRESS/Tim Smith - POOL
Top doctor urges Canadians to keep up with COVID measures, even as vaccines roll out

More than 776,606 vaccines have been administered so far

From the left: Midway RCMP Csts. Jonathan Stermscheg and Chris Hansen, Public Servant Leanne Mclaren and Cpl. Phil Peters. Pictured in the front are Mclaren’s dog, Lincoln and Peters’ dog, Angel. Photo courtesy of BC RCMP
B.C. Mounties commended for bringing firewood to elderly woman

Cpl. Phil Peters said he and detachment members acted after the woman’s husband went to hospital

Dr. Jerome Leis and Dr. Lynfa Stroud are pictured at Sunnybrook Hospital in Toronto on Thursday, January 21, 2021.THE CANADIAN PRESS/Frank Gunn
‘It wasn’t called COVID at the time:’ One year since Canada’s first COVID-19 case

The 56-year-old man was admitted to Toronto’s Sunnybrook Health Sciences Centre

An Uber driver’s vehicle is seen after the company launched service, in Vancouver, Friday, Jan. 24, 2020. Several taxi companies have lost a court bid to run Uber and Lyft off the road in British Columbia. THE CANADIAN PRESS/Darryl Dyck
Taxi companies lose court bid to quash Uber, Lyft approvals in British Columbia

Uber said in a statement that the ruling of the justice is clear and speaks for itself

A 75-year-old aircraft has been languishing in a parking lot on the campus of the University of the Fraser Valley, but will soon be moved to the B.C. Aviation Museum. (Paul Henderson/ Chilliwack Progress)
Vintage military aircraft moving from Chilliwack to new home at B.C. Aviation Museum

The challenging move to Vancouver Island will be documented by Discovery Channel film crews

Most Read