Prime Minister Justin Trudeau had a clear message Wednesday evening for Canadians whose livelihoods are in jeopardy because of the COVID-19 pandemic, that followed on his government’s Speech From the Throne setting out a goal to get the economy, ravaged by the coronavirus pandemic, back on track with a million new jobs.
“The federal government will have your back, whatever it takes, to help you get through this crisis,” he said during a news conference.
Trudeau says protecting our health is priority one because it’s the best way to protect the economy, but his government has a sweeping plan for meeting its job creation goal.
“This will be done by using a range of tools, including direct investments in the social sector and infrastructure, immediate training to quickly skill up workers, and incentives for employers to hire and retain workers. One way the Government will create these jobs is by extending the Canada Emergency Wage Subsidy right through to next summer,” said Governor General Julie Payette.
“The Government will work with businesses and labour to ensure the program meets the needs of the health and economic situation as it evolves. Another example of how the Government will create jobs is by significantly scaling up the Youth Employment and Skills Strategy, to provide more paid work experiences next year for young Canadians.”
An unequal job recovery
Over 1.1 million Canadians are still out of work and many more are working fewer hours and bringing home less money. Payette acknowledged racialized Canadians, young people, and women have been hit the hardest.
To help get women back to work the Government says it “will make a significant, long-term, sustained investment to create a Canada-wide early learning and childcare system.”
“By creating a Canada-wide early learning childcare system we’ll ensure that kids have access to care and that no parent, especially no mother has to put their career on hold,” said Trudeau.
The Liberals also promised tax measures to tackle wealth inequality, including targeting corporate tax avoidance by “digital giants.”
“Web giants are taking Canadians’ money while imposing their own priorities,” Payette said. “Things must change, and will change. The Government will act to ensure their revenue is shared more fairly with our creators and media, and will also require them to contribute to the creation, production, and distribution of our stories, on screen, in lyrics, in music, and in writing.”
She also called on provinces to eliminate barriers to full, free trade.
Businesses forced to close by local health authorities will get financial support. Personal support workers will get a federal wage top up. The Canada Pension Plan survivor’s benefit will get a boost.
There will be a new Canadian Disability Benefit and an employment strategy for Canadians with disabilities. CEBA will be expanded to cover more kinds of expenses.
Ottawa is also working on a free automatic tax filing system for simple returns.
“Over $50 billion in federal transfers require individuals to file their taxes each year. Many low-income and vulnerable Canadians do not receive the benefits they need because of barriers to filing their taxes,” said Toby Sanger, economist and director of Canadians of Tax Fairness.
“Moving to a free automatic tax filing system will help the most marginalized individuals obtain the supports they need at this critical time and help decrease poverty in Canada.”
How much will it cost?
A price tag for the measures was not provided, but the Liberals say this is not the time for austerity, instead it’s a time to use Canada’s “fiscal fire power”. Specifics come later this in the federal government’s fiscal update.
“The next budget will benefit from a somewhat upgraded consensus growth picture for 2020 on the revenue side, but will have to add in spending on the CERB replacements announced before parliament dissolved, as well as what was announced today. This is still a minority government, and the Liberals will need the support of at least one opposition party to approve some of the spending announced today, with leaders of two of those parties now isolated due to positive Covid tests,” said CIBC economists Avery Shenfeld & Royce Mendes in a note.
Spending on COVID-19 programs like CERB and CEWS has put the federal government is on track for $343 billion deficit.
Payette, in the speech said the costs would have been much higher if the federal government did less and the recession would have been worse.
“With interest rates so low, central banks can only do so much to help. There is a global consensus that governments must do more. Governments can do so while also locking in the low cost of borrowing for decades to come. This Government will preserve Canada’s fiscal advantage and continue to be guided by values of sustainability and prudence,” she said.
Trudeau echoed those sentiments and reiterated his plan for his government to take on debt instead of individual Canadians.
“While we’re dealing with this pandemic, I don’t want you or your parent or your friend to take on debt that your government can better shoulder,” he said.
“So yes, in the short term we’ll keep investing. But beyond the emergency, as we start to build back better, we must do that in a fiscally and sustainable way.”
The Canadian Chamber of Commerce says the speech provided some clarity but it offered a “patchwork of disconnected initiatives” that leave many questions unanswered.
“The Canadian Chamber has significant concerns about the debt levels that Canadians will be burdened with for decades to come, without a plan as yet for how to pay for it. Making sure Canadians were supported during the pandemic was necessary and right, but we must move from an economy that is based on subsidies to one where families and businesses can be self-sufficient again and where we don’t burden future generations with a crushing debt load,” said President and CEO Perrin Beatty.
Conservative opposition leader Erin O’Toole, who is in quarantine with COVID-19 says his government does not support the Liberal plan. Bloc Québécois Leader Yves-François Blanchet, who also has COVID-19, says he won’t support it without more money for Quebec for healthcare. NDP leader Jagmeet Singh was also critical, but stopped short of saying he’d help trigger an election.
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.