Finance Minister Chrystia Freeland presents an economic and fiscal update – December 14, 2021
OTTAWA – The liberal government’s economic update on Tuesday ranged from painting an optimistic picture of a recovering economy to a grim portrait of the uncertainty looming thanks to the new variant of COVID-19 plaguing the world.
Federal Finance Minister Chrystia Freeland found herself personally walking that line when she virtually presented the Liberal government’s fall financial statement, after two of her employees tested positive on a rapid test and she decided to cancel public appearances in person. .
“With all the spending here … with all the exhortations I’m making to Canadians to get their reinforcements, use their rapid tests, the right thing to do for me was to behave very cautiously,” he told reporters before presenting the update. in the House of Commons on Friday.
The unknowns of the Omicron variant cause the government to set aside an additional $ 5 billion in spending for this year specifically to answer its potential implications, which so far are believed to be much more contagious than previous ones, but perhaps with less health outcomes. serious.
That is in addition to other new COVID spending measures outlined Tuesday: $ 2 billion for treatments, $ 1.7 billion for rapid tests, $ 100 million for better ventilation in schools, and $ 70 million more for better ventilation. ventilation of community buildings.
However, economic pressures from the pandemic have also helped strengthen the government’s ability to provide some of that additional fiscal support.
Supply chain problems around the world are driving prices up, and rising oil prices mean that more money is entering government coffers through taxes.
Tuesday’s update sets this year’s deficit at $ 144.5 billion, $ 10 billion less than what the government thought it would be when it presented its budget in the spring.
“The performance of the economy has been stronger than we forecast,” Freeland said.
Canada has weathered the “trauma” of the pandemic well, comparatively, Freeland said, pointing to the fact that all lost jobs have recovered, exports are increasing, new businesses are emerging, and as vaccination rates have risen, began a certain normality. to get back.
“With winter upon us, we know there will still be some storms ahead. But we are resistant. Our plan is working, ”he said.
However, the financial update is peppered with caveats.
“The way forward will depend on a series of tail and headwinds, which could boost the recovery or derail it,” the document says.
“It is worrying that the global health situation has deteriorated in recent weeks, with the resurgence of COVID-19 in some regions and the emergence of a new variant, Omicron.”
Rapid recovery projections suggest another $ 6 billion will be removed from the deficit, slow recovery forecasts say around $ 6 billion will be added, as an example of the wild changes that could be to come.
The update is not 100% focused on COVID-19.
It also sets aside $ 5 billion for the federal government’s involvement in helping rebuild British Columbia after natural disasters earlier this year, allocates $ 40 billion over seven years related to Indigenous reconciliation and court settlements, and also money to help resettle Afghan refugees, get the immigration system moving. faster again to address labor shortages and ease carbon tax pricing pressures for farmers and small businesses.
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