PortandTerminal.com, December 1, 2020
“We will not repeat the mistakes of the years following the Great Recession of 2008. There is no choice between our health and the economy”
OTTAWA – It is not often that normally mundane, fiscal topics such as Canadian financial policy make international news. But these aren’t normal times.
Yesterday, Chrystia Freeland, who is Canada’s Deputy Prime Minister and also its Minister of Finance, announced a massive plan for the federal government to spend C$100bn ($77bn) to kick-start the country’s post-pandemic economy. The spending will bring the deficit to a historic C$381.6bn by March 2021.
It is “the largest economic relief package for our country since the Second World War”, Finance Minister Chrystia Freeland said on Monday.
With the announcement of its huge spending plan, Canada, a country widely respected for its fiscal prudence, suddenly made the radar of international news sources including Britain’s BBC News, CNN., France24 and others
The wide-ranging plan includes targeted relief for hard-hit business sectors, investments in long-term care homes and distribution of a Covid-19 vaccine.
“We must also continue to support Canadians and ensure that once the virus is defeated we invest in growth and jobs.“
The announcement – the first full fiscal update from Canada’s Liberal government since the onset of the pandemic – comes as the country battles a steep second wave of Covid-19 infections. The number of active cases in Canada has more than doubled in November alone, bringing the total number of infections to more than 376,000 – according to a tally from Johns Hopkins University. So far, more than 12,000 Canadians have died.
“When the virus is under control and our economy is ready for new growth, we will employ an ambitious stimulus package,” to be spent over the next three years, Ms Freeland said in the House of Commons on Monday. The spending will amount to 3-4% of Canada’s GDP.
To pay for the expansive plan, Canada will see its largest budget shortfall since World War Two. On Monday, Ms Freeland defended the record deficit as affordable – thanks to low interest rates – and necessary for Canada’s economy. “As we have learned from previous recessions, the risk of providing too little support now outweighs that of providing too much,” she said. “We will not repeat the mistakes of the years following the Great Recession of 2008.”
With reporting by BBC news
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