Federal budget at a glance
Under the theme "A Recovery for Jobs, Growth and Resilience", Canada's Finance Minister Chrystia Freeland tabled today Canada's annual budget, two years after the last budget. This is Minister Freeland's first budget following the departure of former Finance Minister Bill Morneau. Marked by the pandemic and economic recovery, this budget is a massive investment by the government to accelerate the return to normalcy and focus on getting Canadians into the workforce.
Here are the highlights of this budget:
Federal government spending for 2021-22 will be $509.8 billion.
Revenues will be $355.1 billion.
The projected deficit for 2021-2022 is $154.7 billion.
There is no mention of a return to a balanced budget. The government is projecting a $30 billion deficit in 2025-2026.
The federal debt is estimated at $1233.8 billion for 2021-2022.
Key measures announced:
- Three-year $101 billion post-pandemic COVID-19 stimulus package. 27 billion will be spent on recovery assistance programs for individuals and businesses. The new flexible EI program will remain in place until 2022.
- Extending the wage and rent subsidies through September 25, 2021. A $12.1 billion measure linked to existing federal programs.
- 1 billion in assistance to sectors most affected by the containment measures (tourism, hospitality, events, etc.)
- 5 billion will be invested in reducing greenhouse gas emissions as part of the Government's priority environmental initiatives.
- 30 billion over five years is being invested to create a national child care system. The average target price for these child care spaces will be $10/day per child by 2025-2026. This is being done to help lower-income people, women and youth, who are heavily affected by the health crisis.
- Creating the new Canadian Economic Recovery Hiring Program to help businesses rehire employees laid off during the pandemic or expand their workforce. The government is investing $595 million in this program, which will run from June to November.
The Finance Minister is also taking a social angle in her budget, mainly by strengthening measures for seniors.
Old Age Security benefits will be increased for people over 75 at a cost of about $2.4 billion per year over the next five years. This includes a first payment this summer and a 10% increase in benefits starting in the summer of 2022.
The federal government is also investing in long-term care with a $3 billion transfer over five years. This is primarily aimed at low-income seniors and those in home care.
The federal government is also planning a full reopening of the economy by the end of the summer, confident that it will be able to provide a vaccine to all Canadians who want it by the end of September 2021.
WILL THE GOVERNMENT FALL ON ITS BUDGET?
Minister Freeland's budget is expected to receive the support of the NDP, as announced by party leader Jagmeet Singh. This will ensure the survival of Justin Trudeau's minority government in Parliament this spring.
The position of the other opposition parties is more equivocal. We expect the Conservative Party, given that it is presenting itself as the alternative to the Liberal Party, to vote against the budget. The Official Opposition will certainly try to introduce amendments to the budget, but in the final vote, they are expected to oppose the final wording of the budget.
As for the Bloc Québécois, its leader Yves-François Blanchet has not committed himself for the moment. Given that his two main proposals, his litmus test, were not included, the party can be expected to vote against the final form of the budget. However, the party has left itself some wiggle room.
This election-oriented budget sets the stage for a possible election this fall when the economy will be booming, the public will be inoculated, and government investments will directly affect many Canadians.
At first blush, the projection of a return to a more controlled deficit in a few years may help the government to justify rapid spending growth. In addition, the large amount of spending will make it difficult for the opposition to defeat the budget in the House.
More than ever, the Prime Minister will be the one who has the option of calling an election at a time of his choosing. He will not stumble upon the budget unintentionally.