FISCAL SNAPSHOT
Liberals foresee high unemployment and a $343 billion deficit due to COVID-19
OTTAWA — Nearly two million Canadian workers could remain unemployed this year, according to forecasts in the federal government’s long-awaited “fiscal snapshot.”
The document released Wednesday details how the Trudeau Liberals see the COVID-19 pandemic dragging down the domestic economy and sending the deficit to a historic $343.2 billion.
The economic and fiscal report lays out the government’s expectation of a slow return to a new normal, with unemployment high and growth low through to at least the end of 2021.
And should the country be hit with a second wave of the novel coronavirus during the annual flu season, the ensuing lockdowns would cause what the Finance Department described as a “deeper and longer-lasting negative impact on the economy.”
The Liberals have repeatedly promised to spend what was needed to put a financial shield between Canadians and irreparable harm. The cost of that promise is now $231.9 billion in direct spending and a deficit comparable only to those seen in the Second World War.
The federal debt is set to pass $1 trillion, by the Finance Department’s estimates.
Whatever the costs, they’re worth it, Prime Minister Justin Trudeau said in a news conference Wednesday morning, before the snapshot was released.
“As we measure the cost of helping Canadians, we shouldn’t forget that the cost of doing nothing would have been far more,” Trudeau said, insisting this is not the time for belt-tightening or austerity.
Goldy Hyder, president of the Business Council of Canada, said the steep cost to the federal treasury, which has covered about $9 out of $10 in emergency governmental aid, underscored how vital it is to get the economy moving again.
Government officials admit there will still need to be policy changes to the EI system to help some self-employed workers qualify, and to capture EI-eligible workers who, due to the pandemic, haven’t been able to work the necessary qualifying hours.
“It’s not easy. We’re in challenging times,” Finance Minister Bill Morneau told reporters. “We’re going to make sure we support people to get through these challenging times because we know that’s the right thing to do.”
Speaking in the House of Commons, Conservative Leader Andrew Scheer said the Liberals failed to provide a plan to stimulate economic and job growth.
“Coming out of the pandemic, every single country on the planet will be desperately competing for the same opportunities and the same investments. So where is the prime minister’s plan to set us apart?”
NDP Leader Jagmeet Singh noted the lack of a plan to help with child care, without which parents — and disproportionately women — won’t be able to return to their jobs.