Federal Government Releases Fall Fiscal Update Outlining Impact of COVID-19
Today, Finance Minister and Deputy Prime Minister Chrystia Freeland provided a Fall Economic Statement (read) that reviewed the financial impacts of COVID-19 on the Canadian economy, and plans for future economic response measures.
Given the economic contraction caused by COVID-19 and the direct spending measures implemented to respond to it, today Minister Freeland reported that there would be a $381 billion deficit for the current fiscal year, and that there would be an expected $121.2 billion deficit in 2021-22 and a further deficit of $50.7 billion in 2022-23.
For the Burnaby business community, several announcements are particularly relevant, although all still require Parliamentary approval:
- Increase the maximum subsidy rate of the Canada Emergency Wage Subsidy to 75 per cent for the period beginning December 20, 2020 and to extend this rate until March 13, 2021, to provide greater certainty to employers.
- Extend the current subsidy rates of the Canada Emergency Rent Subsidy for an additional three periods. This means a base subsidy rate of up to 65 per cent will be available on eligible expenses until March 13, 2021.
- In addition, the government is proposing to extend the rate of 25 per cent for the Lockdown Support for an additional three periods, until March 13, 2021.
- Create a Highly Affected Sectors Credit Availability Program (HASCAP) – a new program for the hardest hit businesses, including those in sectors, like tourism and hospitality, hotels, arts and entertainment. This program will provide low-interest loans of up to $1 million over extended terms, up to 10 years.
- Provide $181.5 million in 2021-22 to the Department of Canadian Heritage and the Canada Council for the Arts to expand their funding programs for the arts and events sector
Minister Freeland also announced plans to spend $70-$100 billion over 3 years for a post-pandemic stimulus program. The Burnaby Board of Trade will work hard to ensure that this proposed stimulus program works to support economic growth, innovation, and competitiveness amongst our business community. However, this $70-$100 billion is not included in the projected deficit numbers noted above.
In addition, the government announced new initiatives would be coming to further address climate change and improving sustainability, and to invest in affordable child care – two areas the Burnaby Board of Trade believes are key economic priorities.