Economic aid could be extended beyond the fall if recovery falters, Freeland says
The country's beleaguered workers and businesses should be able to stand on their own by the fall and no longer need a slew of financial supports come if the economic recovery moves along as expected, Finance Minister Chrystia Freeland says.
The key, though, is the word "should."
As is, the measures to extend business and unemployment benefits will be in place until the end of September after the government's budget bill became law late Tuesday.
An economic rebound is widely expected to take place starting this month, as provinces roll back restrictions and cooped-up Canadians are able to spend more freely on goods and services.
But there are still a number of risks that could pop up between now and then, Freeland says, including the possibility of a fourth wave of COVID-19 that could require a new round of restrictions or lockdowns.
It's why the government still has the right to extend supports until the end of November if necessary. Freeland said nothing is 100-per-cent predictable while the pandemic persists.
Speaking at a news conference Wednesday, Freeland said that uncertainty makes this economic recovery far different than any previous one.
"It's not like turning the lights back on," she said in French. "It might take a while."
In the near term, the winding down of individual benefits shouldn't put a dent in consumer spending because interest rates remain low and costs manageable, while households are sitting on more than $200 billion in savings built up during the pandemic, said Deloitte Canada chief economist Craig Alexander.
However, the drop in income support should push up ratios of household debt relative to incomes, he said, which the Bank of Canada has previously warned could limit Canadians' flexibility to deal with an unforeseen financial shock like the loss of a job.
"The accumulated savings, in a sense, trumps the future rise in debt service costs in the near-term," he said. "That's why despite, increased leverage, consumers are still going to be spending."
The budgetary measures that gained parliamentary approval this week include expanding a Conservative-era income benefit to the working poor that the Liberals expect to lift over 100,000 people out of poverty, a new hiring program to offset payroll costs for companies, and spending to start development of a national child-care system.
A group of child-care advocates and academics called on the Liberals on Wednesday to only send federal funding to non-profit and public daycares, which some provinces have balked at in funding talks.
"It is not going to be a cakewalk. It is going to be complicated to get deals done across the country," Freeland said. "But I am very optimistic and confident we are going to get it done."
All that spending will send the deficit to $154.7 billion this fiscal year, one year after a record-smashing $354.2 billion deficit induced by the pandemic that sent the national debt above $1 trillion.
The parliamentary budget officer said in a report Wednesday that federal finances are sustainable over the coming decades, with room to add spending or reduce taxes by about $18 billion and keeping the debt at 37.7 per cent of overall economy.
The same couldn't be said of provincial and territorial governments. For they most part, they would combined have to find $18 billion to stabilize their collective debt-to-GDP ratio at 28.7 per cent.
This report by The Canadian Press was first published June 30, 2021.
IN DEPTH
Jagmeet Singh pulls NDP out of deal with Trudeau Liberals, takes aim at Poilievre Conservatives
NDP Leader Jagmeet Singh has pulled his party out of the supply-and-confidence agreement that had been helping keep Prime Minister Justin Trudeau's minority Liberals in power.
'Not the result we wanted': Trudeau responds after surprise Conservative byelection win in Liberal stronghold
Conservative candidate Don Stewart winning the closely-watched Toronto-St. Paul's federal byelection, and delivering a stunning upset to Justin Trudeau's candidate Leslie Church in the long-time Liberal riding, has sent political shockwaves through both parties.
'We will go with the majority': Liberals slammed by opposition over proposal to delay next election
The federal Liberal government learned Friday it might have to retreat on a proposal within its electoral reform legislation to delay the next vote by one week, after all opposition parties came out to say they can't support it.
Budget 2024 prioritizes housing while taxing highest earners, deficit projected at $39.8B
In an effort to level the playing field for young people, in the 2024 federal budget, the government is targeting Canada's highest earners with new taxes in order to help offset billions in new spending to enhance the country's housing supply and social supports.
'One of the greatest': Former prime minister Brian Mulroney commemorated at state funeral
Prominent Canadians, political leaders, and family members remembered former prime minister and Progressive Conservative titan Brian Mulroney as an ambitious and compassionate nation-builder at his state funeral on Saturday.
Opinion
opinion Don Martin: Gusher of Liberal spending won't put out the fire in this dumpster
A Hail Mary rehash of the greatest hits from the Trudeau government’s three-week travelling pony-show, the 2024 federal budget takes aim at reversing the party’s popularity plunge in the under-40 set, writes political columnist Don Martin. But will it work before the next election?
opinion Don Martin: The doctor Trudeau dumped has a prescription for better health care
Political columnist Don Martin sat down with former federal health minister Jane Philpott, who's on a crusade to help fix Canada's broken health care system, and who declined to take any shots at the prime minister who dumped her from caucus.
opinion Don Martin: Trudeau's seeking shelter from the housing storm he helped create
While Justin Trudeau's recent housing announcements are generally drawing praise from experts, political columnist Don Martin argues there shouldn’t be any standing ovations for a prime minister who helped caused the problem in the first place.
opinion Don Martin: Poilievre has the field to himself as he races across the country to big crowds
It came to pass on Thursday evening that the confidentially predictable failure of the Official Opposition non-confidence motion went down with 204 Liberal, BQ and NDP nays to 116 Conservative yeas. But forcing Canada into a federal election campaign was never the point.
opinion Don Martin: How a beer break may have doomed the carbon tax hike
When the Liberal government chopped a planned beer excise tax hike to two per cent from 4.5 per cent and froze future increases until after the next election, says political columnist Don Martin, it almost guaranteed a similar carbon tax move in the offing.
CTVNews.ca Top Stories
NDP needs to decide whether 4 million Canadians deserve dental care: minister
Procurement Minister and newly appointed Quebec lieutenant Jean-Yves Duclos is warning the NDP that the dental care program it helped put into place will be in jeopardy if it pulls its support from the governing Liberals.
2 suspended from U.S. college swim team after report of slur scratched onto student's body
At least two students at Gettysburg College in Pennsylvania have been suspended from the swim team after a report that a racial slur was scratched onto a student's body, officials said.
The City of Calgary ended water restrictions for the city at a Sunday morning update.
Myths busted and lessons learned: John Vennavally-Rao on his surgery to reverse his ostomy
Twenty-seven year Â鶹´«Ã½ reporter and anchor John Vennavally-Rao shares his story of what it was like to have an ostomy bag as part of his health-care battle. 'I’m grateful for what it did to extend my life,' he writes in a personal column for CTVNews.ca.
Kate, the Princess of Wales, makes first public appearance after cancer treatment
Kate, the Princess of Wales, made her first public appearance Sunday since she announced she had completed chemotherapy and would return to some public duties.
'Hubris and greed': Takeaways from the first week of U.S. Coast Guard inquiry into the Titan submersible disaster
More than a year after the Titan submersible imploded, killing all five voyagers on board, the story of the ill-fated expedition to the Titanic has taken the form of a modern-day Greek tragedy overflowing with mortal pride and heedlessness.
What is the U.S. Electoral College? America's path to the presidency, explained
In less than two months, Americans will go to the polls to choose their next president. But the process that translates those millions of votes into one seat in the Oval Office is much more complicated than a straight tally.
Trump's goal of mass deportations fell short. But he has new plans for a second term
Donald Trump has long pledged to deport millions of people, but he's bringing more specifics to his current bid for the White House: invoking wartime powers, relying on like-minded governors and using the military.
A Nova Scotian YouTuber has launched a mini-truck bookmobile.
Local Spotlight
Cole Haas is more than just an avid fan of the F.W. Johnson Wildcats football team. He's a fixture on the sidelines, a source of encouragement, and a beloved member of the team.
Getting a photograph of a rainbow? Common. Getting a photo of a lightning strike? Rare. Getting a photo of both at the same time? Extremely rare, but it happened to a Manitoba photographer this week.
An anonymous business owner paid off the mortgage for a New Brunswick not-for-profit.
They say a dog is a man’s best friend. In the case of Darren Cropper, from Bonfield, Ont., his three-year-old Siberian husky and golden retriever mix named Bear literally saved his life.
A growing group of brides and wedding photographers from across the province say they have been taken for tens of thousands of dollars by a Barrie, Ont. wedding photographer.
Paleontologists from the Royal B.C. Museum have uncovered "a trove of extraordinary fossils" high in the mountains of northern B.C., the museum announced Thursday.
The search for a missing ancient 28-year-old chocolate donkey ended with a tragic discovery Wednesday.
The Royal Canadian Mounted Police is celebrating an important milestone in the organization's history: 50 years since the first women joined the force.
It's been a whirlwind of joyful events for a northern Ontario couple who just welcomed a baby into their family and won the $70 million Lotto Max jackpot last month.