Fiscal updates in recent years were drafted as something closer to fiscal snapshots. They provided concise outlines of what a government’s priorities would be for its next budget and, in better times than these, read like a bill of health report on projected debt to GDP, job numbers, tax policy considerations.

But it has been almost two years since we’ve seen a budget tabled in Ottawa, and a wide-ranging Speech from the Throne in September set the stage for ambitious commitments which require costing and … well, real details. With a projected deficit north of $300 billion dollars, this policy document, which will include implementing legislation, had to deliver substantive details on what “building back better” actually means.

More than anything, new Finance Minister Chrystia Freeland had to turn the page on Bill Morneau’s unceremonious exit from his pivotal role in Cabinet with a bold, declarative fiscal update that said to Canadians this government has a plan that will both defeat the virus and lay the foundations for strong economic growth.

It is arguably the second greatest challenge any Finance Minister has had to face since the second World War. Next to the greatest: the tabling of the first post-pandemic budget in the first quarter of next year.

Here’s how this minority Liberal government, with probably months before another election, has tried to meet this challenge.

The Fiscal Picture

We are going to be living with a significant deficit, the likes of which we haven’t seen in our lifetimes. When 8 out of 10 dollars on recovery here in Canada have been spent by the federal government (i.e. you and I as taxpayers), the imperative will be in ensuring there are strong foundations for growth once again.

But the numbers are stark; the deficit is set at $343 billion. Under a best-case scenario for recovery, the deficit will be $381 billion in 2020-2021. If restrictions escalate, it will be nearly $400 billion, with best-case deficit projections at $121 billion in 21-22 and $50 billion in 2022-23.

The debt is even more eye-watering. At the end of September, it was $924 billion and by March of 2024, it is projected to be at $1.4 trillion dollars.

The first Liberal budgets took pride in their economic stewardship by pointing to strong debt to GDP ratios. This, we were told, was the golden mean for determining sustainable, manageable, long term economic growth. The debt to GDP ratio has now skyrocketed to 50.7%, and it is projected to peak in 2022-23 before slowly starting to decline. For context, in the 2019 budget, the ratio was at 31%.

For many Canadians, these numbers have always been abstractions, but debt has hit close to home like never before. The challenge will now be to restore hope that we can dig ourselves out of this shared IOU and that our economy can once again promise record growth. With a purported 80 percent of the jobs lost to this pandemic apparently regained (contrasting to closer to 50 percent in the US), hopeful signs are there, but the bottom line is cause for worry – and is likely to remain so for a few years.

Chapter I: Fighting COVID-19

The first step in economic recovery will be “to defeat this disease.” Here’s how the government plans to do it for communities large and small across the country:

  • $380 million in additional support through the Indigenous Community Support Fund, bringing total investments towards the fund to over $1 billion since the beginning of the pandemic, and $332.8 million to support First Nations, Inuit and Métis communities to offset declines in own-source revenues and to help ensure that Indigenous communities can continue to provide the same level of core community programs and services to their members.
  • $565.4 million to Health Canada and the Public Health Agency of Canada to ensure that federal and provincial laboratories continue to receive sufficient testing supplies and to support the roll-out of new rapid COVID-19 tests and innovative approaches to testing; $37.4 million of this will support research, development, and modelling initiatives.
  • $20.5 million in funding to the Canadian Digital Service to continue delivering the COVID Alert App and to recruit talent that meets the demands for digital services stemming from COVID-19 and other government priorities.
  • 1.5 billion on top of prior amounts to procure PPE and provide warehousing and logistics support to rapidly deliver critical supplies to provinces, territories and Indigenous communities; and removing GST/HST from the purchases of face masks and face shields.
  • $150 million over three years in infrastructure funding to improve ventilation in public buildings.
  • $299.4 million through Reaching Home: Canada’s Homelessness Strategy to enable physical distancing, enhanced cleaning and other emergency health and safety measures to prevent the spread of COVID-19 in shelters.
  • $34.4 million to continue the Mandatory Isolation Support for Temporary Foreign Workers Program.
  • $1 billion for a new Safe Long-term Care Fund to help provinces and territories protect people in long-term care and support infection prevention and control; $6.4 million over two years to the Canadian Foundation for Health Improvement to expand its LTC+ initiative; $1 million to help identify resources to conduct readiness assessments in long-term care facilities and facilitate training on infection prevention and control; and $2.4 million over three years to expand Health Canada’s capacity to support new LTC initiatives and policy work.
  • $50 million to bolster distress centres and $43 million to provide further support for the Wellness Together Canada portal.
  • $66 million over two years to support community-based organizations responding to substance use issues.
  • $35 million for the Canadian Red Cross to respond to COVID-19 and other emergencies plus $150 million over two years to support the Canadian Red Cross and other non-governmental organizations in building and maintaining a humanitarian workforce.
  • $631.6 million over two years in additional support for the ongoing public health response to COVID-19 in Indigenous communities.
  • $186.8 million over two years to address needs and gaps in supportive care facilities and provide additional home care in Indigenous communities, in order to protect elders and other vulnerable community members from COVID-19.

Chapter 2: Supporting Canadians – and Canadian businesses – through the Pandemic

The government has also stressed that it wants “to get families to the other side intact.” Here’s how it plans to do it:

  • The Canada Emergency Wage Subsidy will be reinstated to its maximum rate of 75%. It along with the Canada Emergency Rent Subsidy and Lockdown Support will be extended until March 13, 2021.
  •  A new Highly Affected Sectors Credit Availability Program (HASCAP) will be introduced for those sectors hardest hit by the pandemic – like tourism and hospitality, hotels, arts and entertainment – to offer 100% government-guaranteed financing and provide low-interest loans of up to $1 million over extended terms, up to ten years.
  • The Regional Development Agencies and the Community Futures Network of Canada will receive a $500 million top-up.
  • The Canadian Northern Economic Development Agency will receive $3 million for economic development projects that will support small businesses in Canada’s territories.
  • Western Economic Diversification Canada will be split into separate regional development agencies for British Columbia and the Prairies. Additional details and investments will follow.
  • A minimum of 25% of the Regional Relief and Recovery Fund’s resources will be dedicated to support local tourism businesses, providing more than $500 million in program support through June 2021.
  • $181.5 million will support workers in live events and the arts through expanded funding programs, including a one-year renewal of the Building Communities through Arts and Heritage program, the Canada Arts Presentation Fund and the Canada Music Fund.
  • Broadcasting Part II licence fees collected by the CRTC will be waived in 2020-21 for local television and radio stations, providing $50 million in relief.
  • A new Regional Air Transportation Initiative will provide $206 million over two years in support to regional air transportation and carriers.
  • The Airports Capital Assistance Program (ACAP) will receive $186 million to support health and safety infrastructure investments for small and regional airports, this support will be extended to small federally-owned airports currently eligible for ACAP.
  • There will be an additional $500 million directed to:$A new $500 million transfer program is being introduced to support large airport infrastructure, including airport transit projects.
  • Airport authorities will receive $65 million in financial support and airport rent relief amounting to $229 million will be extended – including waivers for small airports for 2021, 2022 and 2023; for medium airports for 2021 and deferrals for large airports for 2021 with repayment to occur over 10 years beginning in 2024.
  • The Strategic Innovation Fund will make $250 million over 5 years available to support “intellectual property-rich” companies in Canada.
  • The Veterans Emergency Fund will receive a $600,000 to top-up.

Chapter 3: Building Back Better

Finally, the government has flashed its plans to help the country bounce back from this pandemic-induced recession “to get the Canadian economy back to its full potential.” Here’s how it plans to do it:

  • $274.2 million over 2 years for the Indigenous Skills and Employment Training Program, the Foreign Credentials Recognition Program, the Opportunities Fund for Persons with Disabilities, and the Women’s Employment Readiness Canada pilot project.
  • Introduction of a task force that will report to the Deputy Prime Minister and Minister of Finance on policies and measures to be included in the government’s stimulus plan to support women’s employment through the recovery period.
  • The government has committed $420 million in 2021-22 for provincesA new federal Secretariat on Early Learning and Child Care will receive $20 million over 5 years and the government will invest $70 million over 5 years to sustain the existing federal Indigenous Early Learning and Child Care Secretariat. Both secretariats will receive permanent, ongoing funding.
  • Provinces and territories will receive $420 in transfer payments to support the attraction and retention of childhood educators and there will be  an additional $75 million to improve the quality and accessibility of Indigenous child care programs.
  • Low and middle-income families that qualify for the Canada Child Benefit (CCB) will receive $1,200 for each child under the age of six while those families with a net income above $120,000 will receive $600 per child.
  • Support for up to 120,000 job placements through Canada Summer Jobs in 2021-22 and $575.3 million over the next two years toward the Youth Employment and Skills Strategy; government will also eliminate the interest on repayment of the federal portion of the Canada Student Loans and Canada Apprentice Loans for 2021-22.
  • Supply-managed chicken, egg, broiler hatching egg and turkey farmers will receive $691 million across 10-year programs while dairy farmers will receive $1.4 billion in payments over three years.
  • Public Services and Procurement Canada will be launching a pilot program to promote diversity in procurement by opening bidding opportunities for Black owned/operated businesses.
  • $33 million over 3 years to support the 50-30 Challenge to increase diverse representation on corporate boards and in senior management positions; It will also commit $6.6 million to support a task force on modernizing the Employment Equity Act; and $3.6 million on an ongoing basis to expand the Workplace Opportunities and Barriers to Equity Program.
  • The Community Support, Multiculturalism and Anti-Racism Initiatives Program will receive $50 million over two years and not-for-profits will benefit from It will also commit $13 million over 5 years and $2.6 million ongoing to enhance security infrastructure and protect communities at risk of hate-motivated crimes.
  • The government will provide $6.6 million over 5 years and $1.6 million ongoing will support the implementation of Impact of Race and Culture Assessments while It is also committing $28.6 million over 5 years will support Community Justice Centres (CJC) pilot projects in British Columbia, Manitoba and Ontario.
  • The Foreign Credential Recognition Program will receive $15 million, benefitting 15,000 skilled newcomers.
  • Rental Construction Financing Initiative will provide $12 billion in new lending over seven years through CMHC to enable the construction of an additional 28,500 rental units.
  • To promote safer communities, $250 million will support anti-gang programming and The government has also committed $238.5 million over 6 years, with $50 million ongoing, will implement a National Bodyworn Camera Program for RCMP officers.
  • $2.6 billion over 7 years will be granted by Natural Resources Canada to support energy-efficienthome improvements, free EnerGuide energy assessments, and recruit and train EnerGuide energy auditors to meet increased demand.
  • It will provide $150 million over 3 years will build for infrastructure for zero-emission vehicles.
  • $3.16 billion over ten years implement of “nature-based solutions” to climate change, including planting two billion trees and enhancing wetland, peatland, grassland and agricultural carbon sequestration.
  • A new $98.4 million Natural Climate Solutions for Agriculture Fund.
  • The government will provide $25 million toward engineering assessments, community engagement, and environmental and regulatory studies for public infrastructure.
  • To address the infrastructure gap in Indigenous communities, the government is committing:
    • $1.5 billion to accelerate work to lift all long-term drinking water advisories and stabilize funding for water and wastewater infrastructure, including operation and maintenance costs, in First Nations communities.
    • $25.9 million for co-development of infrastructure plans with Indigenous partners
    • $15.6 million over 2 years to support the co-development of distinctions-based health legislation with First Nations, Inuit and Métis Nation partners
    • $200.1 million over 5 years to support the construction and operations of a mercury treatment centre in each affected community
  • $49.3 million to support the implementation of Gladue Principles in the mainstream justice system and Indigenous-led responses; $8.1 million to develop Administration of Justice Agreements with Indigenous communities; and $724.1 million to launch a comprehensive Violence Prevention Strategy.

Opposition Positions

Conservative Party of Canada: Immediately following the Minister of Finance’s Economic Statement, Conservative Leader Erin O’Toole signaled that his party will not be voting in favour of the government’s fiscal plan, calling it a “stealth budget” that hides the government’s shortcomings in extensive spending. The Conservative stance remains focused on obtaining vaccines as a means of rebuilding the economy, as they believe both go hand in hand. Both the Conservatives and the NDP are concerned about austerity measures following the pandemic that hearken back to 1990s era cuts, for example, to healthcare spending and childcare spending.

New Democratic Party: The NDP have identified several areas they felt were absent from the fall economic statement. Some include a lack of a wealth tax; no tax on web giants; and a lack of details on how the government plans to assist vulnerable sectors such as aerospace and tourism. The NDP believes supports to businesses proposed in the statement are not sufficient and that more can be done to create jobs.  According to the NDP, the update also failed to address the need for adequate housing in Indigenous communities. And while he acknowledged that the Liberals have failed to meet their target to end long-term drinking water advisories, Mr. Singh did compliment the government’s progress and their updated commitment to addressing this disparity with non-Indigenous communities.

Bloc Québécois: Bloc Leader Yves-François Blanchet voiced frustration towards conditional healthcare transfers to Quebec. He firmly believes that the crisis will be prolonged in Quebec and the rest of Canada compared to the US and Europe. Blanchet stated that although the government continues to spend, vulnerable people continue to be left behind. There should be more details offered on how to address the gaps that remain in Canada’s economic restart.