COVID-19 was 'expensive,' but Freeland says economy is improving in fiscal update – National Post

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OTTAWA – Finance Minister Chrystia Freeland offered few new economic measures in the Liberals’ fiscal update Tuesday, portraying the Canadian economy instead as well on the way to a post-pandemic recovery.

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Freeland delivered her speech in Parliament on Tuesday amid growing concerns about the Omicron variant of COVID-19, which appears to be spreading across the country. She said the government was budgeting $1.7 billion to buy more rapid tests and ship them out across the country to provinces.

Freeland said that funding will buy 180 million tests and provinces should use the ones they have in storage now.

“There is not a shortage of rapid tests today in Canada, and we have a lot more coming. I really urge Canadians, use rapid tests, use boosters, wear your masks.”

Freeland herself used rapid tests on Tuesday after two of her staff tested positive for COVID-19. She said she has since tested negative, but as a precaution gave the fiscal update virtually rather than appearing in person in Parliament.

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The government has also put aside $4.5 billion as a sort of contingency fund for Omicron related expenses, on top of money already set aside for wage and rent help for hard-hit industries. They have also budgeted $5 billion to help repair damage from the B.C. floods.

Freeland said the government’s plan during the pandemic was to ensure the economy came back as strong as possible.

“Keeping the Canadian economy on life support as we went into COVID-19 hibernation was expensive. But we knew that keeping Canadian families and businesses solvent would help our economy rebound,” she said.

According to the fiscal update, the government ended the last fiscal year, which ended in March, with a $327 billion deficit, down from the $354 billion it was projecting. It also is forecasting to end the current fiscal year $144.5 billion in the red, down roughly $10 billion from the $154.7 billion projected last year.

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Freeland touted job figures and GDP growth, which have trended positively in the last few months. She said the government wanted to ensure that Canada moved swiftly past the damage done by the pandemic, unlike what happened after the 2008 recession.

“We have already more than recovered lost jobs, a healing which took eight months longer after the much milder 2008 recession. And we are on track to recover lost GDP five months more quickly than after the 2008 contraction,” she said.

While the country has regained jobs and GDP growth, inflation has also soared in recent months, rising in October higher than it has been in nearly two decades. Freeland said the government is monitoring the impact, but believes inflation to be primarily a global phenomenon.

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“We know inflation is a global phenomenon driven by the unprecedented challenge of re-opening the world’s economy,” she said. “Turning the world economy back on is a good deal more complicated than turning it off.”

Conservative leader Erin O’Toole was quick to condemn the Liberals’ update as doing nothing for the inflation Canadians are seeing at grocery stores.

“Instead of delivering a plan to combat the cost of living crisis and secure our country’s recovery, the Liberal government is making life more expensive for Canadians,” he said. “Canadians cannot afford for life to get even more expensive – yet that’s exactly what the Liberals’ ideological agenda is doing.”

Freeland defended her party’s economic record pointing out the jobs lost in the pandemic have returned and said even with rising prices, Canadians are better off if they are working.

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“The single most important thing when it comes to the well being of most Canadians is having a job.”

O’Toole said the Liberal plan lacked vision and risked allowing Canada to fall behind its international peers.

“We can get back to building prosperity and great jobs for Canadians, but the Liberal government, as we heard today, has no plans to make that a reality.”

The Conservatives haven’t specifically ruled out supporting the government’s bill for pandemic benefits, but they have also not had many of their demands met.

The Liberals have offered some of what the NDP and the Bloc Québécois were seeking, including a fix for low-income seniors who received CERB payments and now face clawbacks to their Guaranteed Income Supplement.

The update puts aside $742.4 million for low-income seniors who may have taken both benefits and now face clawbacks.

The Bloc was also looking for support for cultural workers in Quebec who have not yet been able to return to regular gigs and performances and the government is putting $60 million aside for that.

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