Canada is projecting a $343bn ($241bn, £200bn) deficit – more than a 1000% increase – for the upcoming fiscal year.
The government has been pumping money into the economy since March, to mitigate the effects of the pandemic.
It is the largest deficit, when compared to the country’s GDP, since World War Two.
About a third of the workforce is unemployed, and the economy is expected to shrink by almost 7% this year.
The projections were released Wednesday as part of the government’s fiscal “snapshot”, in lieu of a budget.
“As we measure the cost of helping Canadians, we shouldn’t forget that the cost of doing nothing would have been far more,” said Prime Minister Justin Trudeau during a press briefing before the snapshot was unveiled.
In order to pay for the increased spending, the government expects to take on $1.2tr in debt, up from about C$768bn.
The government typically presents an itemised budget every March, but the budget for the 2020/2021 fiscal year was delayed because of the pandemic.
Wednesday’s snapshot did not provide many details on how the money would be spent.
“Uncertainty is inherent in any forecast. However, in the current context, uncertainty is magnified to unprecedented levels. In addition to recovery being driven by public health outcomes, it may not follow historical patterns – crises can have a profound impact on economies that lead to permanent change,” the snapshot noted.
The government did indicate it would expand the wage-subsidy programme, which helps employers top-up wages for workers who have had their hours reduced.
It has already paid out about $80bn in individual emergency economic relief, and intends to spend a total of $82.3bn on the wage subsidy programme in the coming year.
Almost 6 million Canadians are out of work, or a third of the workforce, and the government expects the unemployment rate to stay at about 10% for the rest of the year.
Last autumn, Finance Minister Bill Morneau projected the deficit for the upcoming year would be C$28.1bn – up from a deficit of C$14bn two years ago, before Mr Trudeau’s Liberal Party won a second mandate.
‘Undermine fiscal ability for decades’
But the coronavirus shutdown triggered the country’s biggest economic downturn since the Great Depression, says a press release from the finance minister.
Canadian Chamber of Commerce’s president and CEO, Perrin Beatty, said the deficit and added debt, which is worth nearly half the country’s GDP, will “undermine Canada’s fiscal capacity for decades”.
“It is now time for Canada to transition from a subsidy-based crisis response toward restoring economic growth and getting Canadians safely back to work,” Mr Beatty said in a press release.
In June, Fitch Ratings, one of the US’s big-three credit rating agencies, downgraded Canada’s credit rating from AAA to AA+.
The last time the country had its credit rating downgraded was in 1995, from Moody’s Investors Service Inc.
At the time, Canada’s debt-to-GDP was at about 66% – the highest in the G7 – and interest rates were high.
Today’s debt-to-GDP ratio is lower, at 49%, up from 31% during last fiscal year, and interest rates are at historic lows.
VANCOUVER – Contract negotiations resume today in Vancouver in a labour dispute that has paralyzed container cargo shipping at British Columbia’s ports since Monday.
The BC Maritime Employers Association and International Longshore and Warehouse Union Local 514 are scheduled to meet for the next three days in mediated talks to try to break a deadlock in negotiations.
The union, which represents more than 700 longshore supervisors at ports, including Vancouver, Prince Rupert and Nanaimo, has been without a contract since March last year.
The latest talks come after employers locked out workers in response to what it said was “strike activity” by union members.
The start of the lockout was then followed by several days of no engagement between the two parties, prompting federal Labour Minister Steven MacKinnon to speak with leaders on both sides, asking them to restart talks.
MacKinnon had said that the talks were “progressing at an insufficient pace, indicating a concerning absence of urgency from the parties involved” — a sentiment echoed by several business groups across Canada.
In a joint letter, more than 100 organizations, including the Canadian Chamber of Commerce, Business Council of Canada and associations representing industries from automotive and fertilizer to retail and mining, urged the government to do whatever it takes to end the work stoppage.
“While we acknowledge efforts to continue with mediation, parties have not been able to come to a negotiated agreement,” the letter says. “So, the federal government must take decisive action, using every tool at its disposal to resolve this dispute and limit the damage caused by this disruption.
“We simply cannot afford to once again put Canadian businesses at risk, which in turn puts Canadian livelihoods at risk.”
In the meantime, the union says it has filed a complaint to the Canada Industrial Relations Board against the employers, alleging the association threatened to pull existing conditions out of the last contract in direct contact with its members.
“The BCMEA is trying to undermine the union by attempting to turn members against its democratically elected leadership and bargaining committee — despite the fact that the BCMEA knows full well we received a 96 per cent mandate to take job action if needed,” union president Frank Morena said in a statement.
The employers have responded by calling the complaint “another meritless claim,” adding the final offer to the union that includes a 19.2 per cent wage increase over a four-year term remains on the table.
“The final offer has been on the table for over a week and represents a fair and balanced proposal for employees, and if accepted would end this dispute,” the employers’ statement says. “The offer does not require any concessions from the union.”
The union says the offer does not address the key issue of staffing requirement at the terminals as the port introduces more automation to cargo loading and unloading, which could potentially require fewer workers to operate than older systems.
The Port of Vancouver is the largest in Canada and has seen a number of labour disruptions, including two instances involving the rail and grain storage sectors earlier this year.
A 13-day strike by another group of workers at the port last year resulted in the disruption of a significant amount of shipping and trade.
This report by The Canadian Press was first published Nov. 9, 2024.
The Royal Canadian Legion says a new partnership with e-commerce giant Amazon is helping boost its veterans’ fund, and will hopefully expand its donor base in the digital world.
Since the Oct. 25 launch of its Amazon.ca storefront, the legion says it has received nearly 10,000 orders for poppies.
Online shoppers can order lapel poppies on Amazon in exchange for donations or buy items such as “We Remember” lawn signs, Remembrance Day pins and other accessories, with all proceeds going to the legion’s Poppy Trust Fund for Canadian veterans and their families.
Nujma Bond, the legion’s national spokesperson, said the organization sees this move as keeping up with modern purchasing habits.
“As the world around us evolves we have been looking at different ways to distribute poppies and to make it easier for people to access them,” she said in an interview.
“This is definitely a way to reach a wider number of Canadians of all ages. And certainly younger Canadians are much more active on the web, on social media in general, so we’re also engaging in that way.”
Al Plume, a member of a legion branch in Trenton, Ont., said the online store can also help with outreach to veterans who are far from home.
“For veterans that are overseas and are away, (or) can’t get to a store they can order them online, it’s Amazon.” Plume said.
Plume spent 35 years in the military with the Royal Engineers, and retired eight years ago. He said making sure veterans are looked after is his passion.
“I’ve seen the struggles that our veterans have had with Veterans Affairs … and that’s why I got involved, with making sure that the people get to them and help the veterans with their paperwork.”
But the message about the Amazon storefront didn’t appear to reach all of the legion’s locations, with volunteers at Branch 179 on Vancouver’s Commercial Drive saying they hadn’t heard about the online push.
Holly Paddon, the branch’s poppy campaign co-ordinator and bartender, said the Amazon partnership never came up in meetings with other legion volunteers and officials.
“I work at the legion, I work with the Vancouver poppy office and I go to the meetings for the Vancouver poppy campaign — which includes all the legions in Vancouver — and not once has this been mentioned,” she said.
Paddon said the initiative is a great idea, but she would like to have known more about it.
The legion also sells a larger collection of items at poppystore.ca.
This report by The Canadian Press was first published Nov. 9, 2024.
