Aid programs to be modified, others to end, Trudeau says

OTTAWA—The federal government is in talks with business and labour groups to figure out the future of billions in emergency aid, Prime Minister Justin Trudeau said one day after a warning that current spending was sustainable for only so long.

Emergency federal aid to date is approaching $152 billion in direct spending, which has pushed the deficit to an estimated $260 billion this fiscal year.

Parliament’s spending watchdog told a Senate committee Tuesday that current spending levels would limit the government’s ability to provide needed stimulus money during a recovery.

Budget officer Yves Giroux also said emergency programs had to sunset or else the country could be looking at tax levels not seen for generations.

Speaking outside his Ottawa residence Wednesday, Trudeau said some of the aid programs will have to be phased out.

Others, he said, would need to continue or be tweaked to aid in a recovery.

In his opening remarks, Trudeau seemingly previewed his thinking on the issue. He said fewer people would need help through the Canada Emergency Response Benefit as businesses reopen and workers are rehired, possibly with help from a federal wage subsidy.

The most recent CERB figures show more than $41 billion in benefits to 8.25 million people, pushing further beyond its $35billion budget.

The first cohort of CERB recipients will max out their benefits the first week of July, raising questions about what to do with those who still don’t have a job, or those who can’t qualify for employment insurance.

Treasury Board President Jean-Yves Duclos told a midday press conference the CERB would likely lead to another support measure because something new will be needed to create a smoother recovery phase.