Canada will post a deficit of more than $381 billion this fiscal year, as total debt is expected to be near $1.2 trillion.
And Finance Minister Chrystia Freeland has announced another up to $100 billion in stimulus spending to help the country recover from the COVID-19 pandemic.
The short-term stimulus package is valued at $70-$100 billion over roughly three years.
The government said the stimulus spending — mainly based on environmental issues — will launch after a coronavirus vaccine is distributed.
When the virus is under control and our economy is ready for new growth, we will deploy an ambitious stimulus package to jump-start our recovery,” Freeland said in an economic update in the House of Commons today.
“Spending roughly three to four per cent of GDP, over three years, our government will make carefully judged, targeted and meaningful investments to create jobs and boost growth.”
She said a $1-billion fund will be set up to help provinces and territories improve COVID-19 infection control in long-term care facilities.
The Liberal government is also proposing a temporary support in 2021 of up to $1,200 for each child under six for low and middle-income families eligible for the Canada child benefit (CCB).
Freeland said the Liberals are also laying the groundwork for a Canada-wide early learning and child care system, with more details in next year’s federal budget.
“”I say this both as a working mother and as a minister of finance — Canada will not be truly competitive until all Canadian women have access to the affordable child care we need to support our participation in our country’s workforce,” Freeland said.
Freeland also promised to reduce debt by eliminating interest on the federal portion of Canada student loans and Canada apprentice loans for next fiscal year.
It also pledges $1.5 billion to speed up the process of lifting all long-term drinking water advisories in First Nations communities.
The government will also spend $2.6 billion over the next seven years for home energy retrofit grants of up to $5,000 and spend more than $3 billion to plant two billion trees.
“We are all tired. But we also know vaccines, and a better day, are coming. To get to that day, we must first help each other get through the winter,” she said.
In an earlier statement the Liberals said the projected debt will be $1.2 trillion by March 2021, up from $765 billion a year earlier.
“A trillion dollars in debt is a sadly historic milestone and our kids and grandkids will be stuck with these bills,” said Aaron Wudrick, Federal Director for the Canadian Taxpayers Federation.
“It’s inexcusable that the Trudeau government has gone more than 20 months without so much as presenting a budget because Canadians deserve a credible plan to get runaway spending under control.
“Alarmingly, there are no fiscal targets, and the government actually pledged to add another $100 billion in debt after the pandemic ends, effectively committing to spend money before it even knows what to spend it on.
“There doesn’t seem to be any place where the Trudeau government has even tried to save money and there’s no tax relief. A pandemic isn’t a free pass to cynically increase spending on everything, especially when taxpayers are struggling.”
The government is predicting ongoing deficits are expected to be at least $121 billion in the red next year and $24 billion in deficit five years from now.
“All of this federal debt will have to be paid back and that’s especially concerning for Alberta taxpayers who have been paying more than our fair share of Ottawa’s spending for decades,” said Franco Terrazzano, the CTF’s Alberta Director.
“Albertans need tax relief, we don’t need a bigger tax bill from Ottawa.”
Dave Naylor is the News Editor of the Western Standard
dnaylor@westernstandardonline.com
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