Canada’s taxpayers can expect a federal deficit for years to come, if 2021’s proposed federal budget receives enough support from opposition parties.
At the House of Commons today, Deputy Prime Minister and Finance Minister Chystia Freeland released Budget 2021: A Recovery Plan for Jobs, Growth and Resilience, which lists protecting the health and safety of Canadians as Ottawa’s top priority.
“This is a day when people across Canada are fighting the most virulent wave of the virus we’ve experienced so far. Healthcare workers in many provinces are struggling to keep ICUs from overflowing. Millions of Canadians are facing stringent new restrictions.”
“We’re all tired. Frustrated, and even afraid. But we will get through this. We will do it, together. This budget is about finishing the fight against COVID-19,” adds Freeland.
Canada’s deficit is expected to reach $354.2 billion in 2021-2022 before falling to $154.7 billion in 2022-2023, with gradually declining deficits through 2025-2026, where it's estimated to be at about $30.7 billion. Surprisingly, $354 billion is less than the $381 billion that Ottawa originally expected.
Prior to the COVID-19 pandemic, this year’s deficit was projected to be $19.7 billion as of the 2019 budget. As of Canada’s 2020 fall economic update, in the midst of the second wave of the virus, the deficit was updated to $381.6 billion – a difference of $361.9 billion, largely due to COVID-19.
Initiatives of the 739-page plan include creating an additional 1 million jobs in Canada by the end of the year, to build 35,000 new homes, a green energy recovery program and the development of a national early learning and childcare system.
The $30 billion childcare initiative aims to reduce fees for parents with children in childcare by 50 percent on average by 2022, with a goal of reaching $10 per day on average by 2026, everywhere outside of Quebec. It also aims to bring more women into the workforce with $8.3 billion yearly investments.
The budget also plans to extend the COVID-19 wage subsidy, rent subsidy and lockdown supports through the end of September, with plans to gradually begin reducing payments by July. Although, they could be extended through November if required.
Other supports include an extension of the maximum period of employment insurance sickness benefits from 15 weeks to 26 weeks, a $15 federal minimum wage, the doubling of Canada Student Grants and more grants and supports for businesses affected by the pandemic.
The budget fails to include the Liberal Party’s proposed Universal Basic Income project, discussed earlier this month at a Liberal policy convention. The resolution, co-sponsored by the Liberal party, passed by an overwhelming 491-85 vote. It would provide Canadians with a certain amount of earnings each month.
The Liberal Party’s long-promised national pharmacare program also wasn’t introduced in this year’s proposal – an initiative the party has been promising since the 2019 budget.
Today was Deputy Prime Minister and Minister of Finance Chystia Freeland’s first budget process. She took on the Finance Minister portfolio after Minister Bill Morneau’s resignation last year, and 2020’s budget was pushed back due to the onset of the COVID-19 pandemic.
Freeland’s budget will be viewed as a vote of confidence for the minority Liberal government, who will require backing from opposition parties to pass the proposed budget. If they do not receive enough support, the government could fall – triggering a federal election.
If an election is called, a bill has been proposed in the House of Commons to make amendments to Canada’s Elections Act to allow for a safe election process during the pandemic, if needed.
The bill would mandate two additional in-person voting days to avoid crowded polling stations, online and mail-in voting and registration, and secure drop boxes placed in each community. Polling stations would be expected to be moved away from long-term care homes, where many are typically held.
As it stands, if an election is called, voters would have the choice of incumbent Prime Minister Justin Trudeau, Erin O’Toole of the Conservatives, Yves-Francois Blanchet of the Bloc Quebecois, Jagmeet Singh of the NDP and Annamie Paul of the Green Party of Canada, among other parties who do not have any sittings MPs currently.