Liberal Government Vows to Continue Spending, Extends Wage and Rent Subsidies by $15 Billion

Despite what appears to be a strengthening economic recovery, Canada’s Finance Minister Chrystia Freeland vowed to continue keeping the federal spending taps wide open, and do”whatever it takes” to support the economy.

The latest Statistics Canada data shows that GDP levels in the final quarter of 2020 increased by 9.6%, putting economic activity only 3% below pre-pandemic levels observed in February of last year. However, despite the optimistic figures and the ongoing vaccine rollout, Freeland reiterated the Liberal government’s commitment to continue spending throughout the Covid-19 pandemic. “Our government will continue to do whatever it takes, for as long as it takes, to help Canadians through this bleak time, to prevent economic scarring and to invest in a way that allows us all to come roaring back after COVID-19,” she said at a news conference in Ottawa on Wednesday.

At the news conference, Freeland, along with Prime Minister Justin Trudeau, announced that the federal government will be extending the current emergency wage and rent subsidies by an additional $15 billion from March until the end of June. Thus far, Ottawa has already spent $83.5 billion on the wage subsidy that has alleviated financial strain for 5 million Canadian workers, along with $4.4 billion on the rent subsidy that was allocated to 129,000 businesses.

In an effort to cushion Canada’s economy from the financial impacts of the Covid-19 pandemic, Prime Minister Justin Trudeau has caused the country’s deficit to soar to the highest among OECD countries. In fact, Canada’s deficit soared to $248.2 billion in the nine months ending on December 31, amounting to a $237.2 billion increase from the same period a year prior. A large part of the borrowing has been the result of numerous income support programs that provided direct payments to consumers and businesses amid the pandemic.

However, according to some critics, the Liberal government may have gone overboard with its bottomless spending— for every dollar of income that was lost, the government spent $20 in household transfer payments. Nonetheless, Freeland defended the extensive spending initiatives, and reassured Canadians that the Liberal government will exercise caution whilst still continuing to keep the taps flowing. “We are constantly, carefully evaluating government spending, government debt, jobs numbers and economic growth,” she said. “We are prudent and we are responsible, but sometimes the greatest danger is not to act and we understand that risk, too.


Information for this briefing was found via Statistics Canada and the Canadian Press. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

New Found Gold: The Strategic Maritime Resources Purchase

Amex Exploration: Revised Perron PEA Has INSANE Economics

Aris Mining: The Multi Billion Dollar Soto Norte PFS

Recommended

Canadian Copper Secures $8 Million Lead Order From Ocean Partners As Part Of Larger Funding Round

Northern Superior Expands Philibert With 350 Metre Step Out Testing 1.10 g/t Gold Over 25.5 Metres

Related News

Canada’s Employment Numbers Back to 1980’s Level Amid COVID-19 Pandemic

According to preliminary Canada Emergency Response Benefit (CERB) data, the number of unemployment claims since...

Tuesday, April 28, 2020, 08:16:54 AM

Canadian Inflation Cools to 1.6% in September, Lowest Since 2021

Canada’s annual inflation rate decelerated to 1.6% in September, down from 2.0% in August, marking...

Tuesday, October 15, 2024, 08:43:42 AM

Toronto Pearson Airport Reports Further Layoffs, Anticipates Pre-Pandemic Level Recovery to Take 3-5 Years

Much like the stagnant demand for air travel south of the border, Canadian airports have...

Wednesday, July 15, 2020, 04:41:00 PM

Pierre Poilievre’s Conservative Party Breaks Record for Fundraising Dollars in Q4 2022

The Conservative Party of Canada likes its new leader and it shows. The party was...

Thursday, February 2, 2023, 07:23:52 AM

Home Sales in the Greater Toronto Area Show Signs of Rebound in May

When the coronavirus pandemic made its way into Canada in February, a series of lockdown...

Thursday, June 4, 2020, 11:13:00 AM