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COMMENTARY: Budget 2022 and Canada’s incredible disappearing deficits – Global News

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Before we’d ever heard of COVID, there was a time when the first question asked of any Finance Minister delivering their budget was always: “Is it balanced?” Those days are long gone, and the pandemic is a big reason why.

Federal Finance Minister Chrystia Freeland delivered her 2022-23 budget this week, with a bottom line that is $53 billion in the red. Once upon a time that would have been considered a big deficit, but no longer. Very few of the questions she faced in the post-budget scrum had anything to do with the deficit.

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Budget 2022: Liberals will put $15B toward new business investment fund

Even the Opposition seemed half-hearted about attacking the red ink. Conservatives complain about Liberal “big spending,” but then propose their own measures (including tax cuts) that would produce a virtually identical deficit.

Best of all, that $53 billion deficit is melting away before our eyes anyway – without pompous rhetoric about “fiscal rectitude,” or without painful austerity. This year’s deficit is less than half the size of last year’s, which in turn was one-third the previous deficit.

The annual deficit has shrunk by $275 billion in just two years, even as the government announces new initiatives: like $5 billion for the dental care program it negotiated with the NDP.

Read more:

Dental care program for kids under 12 will roll out by end of year: Budget 2022

What gives? Why is the deficit disappearing, both in dollars and in political importance? It seems that we’ve all learned a thing or two about budgets since the pandemic struck.

The first is that governments have virtually unlimited power to spend big when they need to. They did it before: like in the Second World War when no politician would dare to complain that Canada’s military effort was “too expensive.” And they did it again during COVID. Ottawa boosted spending $250 billion in one year to protect health, and keep Canadians working and in their homes; the provinces spent tens of billions more.






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Full breakdown of the 2022 Federal budget


Full breakdown of the 2022 Federal budget

The second lesson is that infatuation with balanced budgets is misplaced and counterproductive. Economists have come to appreciate that deficits, even long-running ones, can play a vital role in supporting growth and jobs when other sources of spending (like business investment or exports) are inadequate.

The final and most pleasant lesson is that the best way to get rid of a deficit is not to slash-and-burn public programs – as Canada did in the 1990s, and Europe did in the 2010s. Apart from imposing avoidable harm on society (shrinking services and infrastructure), austerity also undermines the fundamental math of fiscal progress. By sapping the macroeconomy of so much spending power, austerity slows growth, causing self-inflicted damage to the government’s own budget.
The exact opposite dynamic is now occurring in Canada, to the delight of Ms. Freeland – and her provincial counterparts. Canada’s economy is firing on all cylinders. And government’s aggressive response to the pandemic is the main reason why.

Read more:

Canadian economy grew 0.2% in January despite COVID restrictions

Canada’s nominal GDP grew at an astounding annualized rate of over 13 per cent in the fourth quarter of 2021. Growth this year may be as fast, perhaps faster. The unemployment rate hit a new 50-year low of 5.3 per cent in March. Wages are growing as a result, pumping billions into Canadians’ wallets – and billions into government coffers (via income taxes and GST).

This rapid growth reflects a combination of recovery from the pandemic, strong job creation, rising world prices for our resource exports, and inflation. Indeed, for the first time in 30 years, growth is so strong the Bank of Canada is now struggling to keep inflation within its target range (of 1 to 3 per cent). That will mean higher interest rates in the coming months (though rates will stay low by historical standards). But that same inflation is boosting government revenues and shrinking the deficit.






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Ways to save money as inflation soars


Ways to save money as inflation soars – Mar 26, 2022

This happy fiscal recipe is being enjoyed by provincial governments, too. Several have already balanced their budgets – even Alberta, which had the worst deficit of all (relative to GDP) during the pandemic. Across the country, remaining provincial deficits equal just 1 per cent of GDP: puny by any standard.

Read more:

Most Canadian provinces have ‘roared back’ amid disappearing COVID deficits: report

Through these hard and frightening two years, Canadians have learned government can and must do big, expensive things to protect us when needed. Governments were not put on earth to balance their budgets; they were invented to protect and advance the public interest. And the best way to pay for the things government does is to create jobs and grow the economy. That’s now happening in a big way – and Canadians are better off for it.

Minister Freeland did not set a specific timetable for balancing the budget, and this is appropriate: partly because medium-run projections are inherently uncertain, but mostly because we now realize it doesn’t matter. By the last year of her forecast (2026-27), the remaining deficit is no more than a rounding error. And it’s not any more significant in political terms, either.

Jim Stanford is an economist and director of the Centre for Future Work in Vancouver.

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Frozen waffles from Whole Foods join Canadian recall list over listeria concerns

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OTTAWA – Whole Foods Market is joining the growing list of brands whose frozen waffles have been recalled in Canada this week because of possible listeria contamination.

The Canadian Food Inspection Agency says the newest recall spans the Amazon-owned grocer’s organic homestyle and blueberry waffles sold under the 365 Whole Foods Market label.

The agency says the waffles recalled by Horizon Distributors Ltd. were sold in British Columbia, but may have also made their way to other provinces and territories.

It adds there have been no reported illnesses associated with the waffles, but the agency is conducting a food safety investigation, which it says may lead to the recall of other products.

Dozens of frozen waffles from brands like Compliments, Great Value, Duncan Hines and No Name were recalled earlier in the week over similar listeria concerns.

Food contaminated with Listeria monocytogenes may not look or smell spoiled but can cause vomiting, nausea, persistent fever, muscle aches, severe headache and neck stiffness.

This report by The Canadian Press was first published Oct. 26, 2024.

The Canadian Press. All rights reserved.



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People with disabilities ask feds to restore ‘hope’ and raise benefit amount

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TORONTO – Heather Thompson would love to work.

The 26-year-old dreams of going back to university to study politics and environmental science, and ultimately pursue a career to “try and make things better” in society.

“I’m not the person I want to be yet and I want to be able to achieve certain goals and be a well-rounded, well developed person. But I’m prevented from doing that because I live in legislated poverty,” they said.

Thompson is one of 600,000 working-age Canadians with disabilities that the federal government said it would help lift out of poverty with the Canada Disability Benefit, which takes effect next July. The program is meant as a top-up to existing provincial and territorial income supports.

“We had huge expectations and we had all this hope, like finally we can escape poverty,” Thompson said.

But after last spring’s federal budget revealed that the maximum people will receive per month is $200, the hopes of people like Thompson were dashed. Now, advocates are asking the federal government to reconsider the amount in the months before the benefit rolls out.

Thompson, who uses they/them pronouns, has worked at Tim Horton’s, Staples and a call centre, but said their physical and mental disabilities — including osteoarthritis, which “heavily impacts” their mobility, along with clinical depression and generalized anxiety disorder — have forced them to leave.

They look for jobs, but many require the ability to lift or stand for long periods, which they can’t do. So Thompson lives on $1,449 a month from the Ontario Disability Support Program (ODSP) and shares a house with three roommates in Kingston, Ont., along with Thompson’s 12-year-old emotional support cat, Captain Kirk.

Thompson went to university in 2017, but their mental health issues flared and they had to leave after a semester. Seven years later, they’re still trying to pay that student loan back.

When Bill C-22, which mandated the creation of a Canada Disability Benefit, was passed into law last year, Thompson was “so excited.”

A news release issued by the federal government on June 22, 2023 called the legislation “groundbreaking,” saying the disability benefit would “supplement existing federal and provincial/territorial disability supports, and will help lift working-age persons with disabilities out of poverty.”

It said the benefit would be part of the government’s “disability inclusion action plan” that would “address longstanding inequities that have led to the financial insecurity and exclusion” experienced by people with disabilities.

The government simply hasn’t lived up to its promise, said Amanda MacKenzie, national director of external affairs for March of Dimes Canada, one of the organizations that supported the creation of the benefit.

Now that a public consultation period on the benefit ended last month, she is hoping the government will reconsider and increase the benefit amount in its next budget.

”These are people that are living well under the $30,000 a year mark, for the most part,” MacKenzie said.

“These are the people that you hear about all the time that are saying, ‘I can only have two or one meal a day. I can only afford to take my medication every other day … I can’t support my kids. I can’t help my family. I can’t do anything because you know, I can barely pay my rent,'” she said.

March of Dimes Canada and many people with disabilities all participated in early government consultations about how the federal benefit could be effective in topping up provincial disability support programs to provide a livable income.

”Who were they listening to?” asked Thomas Cheesman, a 43-year-old in Grande Prairie, Alta., receiving provincial disability benefits due to a rare disorder that causes his bones to break down.

“Not one single disabled person would say that this is an adequate program,” he said.

Cheesman was born with Hajdu-Cheney Syndrome and knew he wouldn’t be able to work as long as most people, but managed to work as a chef until he was 39.

At that point, his physical symptoms became so debilitating he had to stop.

“It was just too dangerous between either taking medications to handle pain and being distracted from that, or not being able to function because of the pain,” he said.

Cheesman and his wife, who works as a supervisor at Costco, have three children. Before the Canada Disability Benefit became law, he “did a lot of math” and calculated it would need to total almost $1,000 a month for his family “to have a life outside of poverty.”

In an emailed response to The Canadian Press, the office of Kamal Khera, minister of diversity, inclusion and persons with disabilities, said it was making a $6.1-billion investment “to improve the financial security of over 600,000 persons with disabilities.”

“This is a historic initial investment … and is intended to supplement, not replace, existing provincial and territorial income support measures,” said Khera’s press secretary, Waleed Saleem.

“We also aspire to see the combined amount of federal and provincial or territorial income supports for persons with disabilities grow to the level of Old Age Security (OAS) and the Guaranteed Income Supplement (GIS), to fundamentally address the rates of poverty experienced by persons with disabilities.”

That would mean people with disabilities would get a total monthly income equal to what low-income seniors get from the federal government.

MacKenzie said the lack of adequate financial support for people with disabilities is “not OK,” noting that the money they spend goes back into the economy.

“We tell people with disabilities that what they deserve and what we can afford to give them in society is an existence. It’s not a life,” she said.

For Thompson, that’s “a really hard pill for me to swallow.”

”A lot of people don’t see us as human. They see us as a drain on society,” they said.

”We’re worth investing in.”

This report by The Canadian Press was first published Oct. 26, 2024.

Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.



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Quebec Liberals call to investigate closures of French-language classes for newcomers

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MONTREAL – The Quebec Liberal Party has called for the French language commissioner to investigate the cancelling of some French-language training courses for newcomers to the province.

Citing an “ongoing series of closures of francization programs,” the Opposition party announced Saturday morning in a news release that its critics for the French language and French classes, André Albert Morin and Madwa-Nika Cadet, sent a letter to the Commissioner of the French Language.

The letter asks commissioner Benoît Dubreuil to “investigate to ensure that the right to French language learning services, included in the Charter of the French Language, is respected,” the release said.

The Liberals are blaming the Coalition Avenir Québec government’s budgetary decisions, which it says, “jeopardize the possibility for immigrants to become French speakers within a time frame that would facilitate their integration into the job market and into Quebec society.”

In several interviews this week, Quebec’s Immigration Minister Jean-François Roberge blamed school service centres for the closures, saying his government has actually increased budgets for French-language courses.

However, media reports this week described education centres forced to cut back on programming because of budget constraints imposed on them by the province, which have also resulted in teachers losing their jobs.

“These cuts have led, in recent weeks, to the cancellation of French courses, particularly in the regions of Abitibi-Témiscamingue, the Capitale-Nationale, Estrie, Laval , the Laurentides, Mauricie and Montreal,” the release said.

Aside from cancellations, the Liberals say average wait times for full-time French study has recently doubled to four months while people who are enrolled are sometimes forced to travel hundreds of kilometres to attend class.

“There is an impression of disorder that suggests the government is unable to meet its obligations under the Charter of the French Language,” the letter sent to the Commissioner late Friday stated.

The closures come at a time of increased demand for the classes, with Quebec currently hosting around 600,000 temporary immigrants. Quebec has repeatedly asked the federal government for more power and funds to deal with the surge in newcomers, but the CAQ leadership has also come under fire from Ottawa.

Federal Public Services and Procurement Minister Jean-Yves Duclos said Friday that the $750 million the federal government is spending to help the province with newcomers is not being fully used.

“We absolutely must invest the necessary sums in francization,” said Duclos. “If we want new arrivals to be able to reach their full potential, we have to offer them appropriate services.”

Cadet told The Canadian Press in an interview the government is clearly struggling to provide the right to learn French.

“So in our opinion, the commissioner should have the mandate to investigate this, and that’s why we wrote him this letter,” Cadet said, but would not say whether her party would increase French-language budgets.

Last February, Dubreuil stated it would cost between $10.6 and $12.9 billion for all temporary immigrants to complete intermediate-level training in French.

Cadet responded by saying, “I don’t think we’re in that type of scenario. I think there’s a way to better deploy the offer and make sure there are no service breakdowns.”

–With files from La Presse Canadienne

This report by The Canadian Press was first published Oct. 26, 2024.

The Canadian Press. All rights reserved.



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