More Spending Announced in Canada’s Fall Economic Update

During the The government’s fall economic update, Deputy Prime Minister and Finance Minister Chrystia Freeland announced that spending will continue, to help Canadian business and families during the COVID-19 pandemic.

To support businesses, the government wants to bring the wage subsidy back to 75 per cent of business payroll costs, the cost expected to be $83.5 billion after it’s extension in the fall. The government will also extend the business rent subsidy to mid-March.

Additional measures will also be taken for a safe “long-term care fund” for the provinces and territories. This will come in the form of $1 billion in funding.

Freeland says middle class families are struggling, and the government has proposed temporary, additional support, for the Canada Child Benefit. This will total $1200 in 2021 for each child under the age of 6. The cost of this will be about $2.4 billion.

Noting an unacceptable gap in infrastructure in Indigenous communities, Freeland also announced $1.5 billion beginning in 2020-21 to speed up the lifting of all long term water drinking advisories in First Nations communities.

Freeland says the deficit, that is now closing on $400 billion, is affordable and necessary, and that the bigger mistake would be spending too little rather than spending too much. To offset some of the costs Freeland also released information of the government’s plan to charge sales taxes on digital companies. Taxes that will likely trickle down to the users of these companies. Freeland says sales taxes will apply to all goods and services consumed in Canada, including services like Airbnb.

The Minister of Finance states when the virus is under control, the federal government will deploy an ambitious stimulus package to jump-start recovery. Spending roughly 3 to 4% of GDP over three years, Freeland says the federal government will make carefully judged, targeted, and meaningful investments to create jobs and boost growth.

Freeland says the next Federal budget, expected in the spring of 2021 will provide more concrete details.