OTTAWA (Reuters) -Canadian Prime Minister Justin Trudeau’s government on Monday lined up billions in new spending to provide emergency support during a virulent third wave of COVID-19 and to help launch an economic recovery ahead of an election expected later this year.
The budget, the Liberal government’s first in two years because of the pandemic, is aimed squarely at boosting near-term growth and includes a long-promised national daycare plan.
It also follows through on stimulus promised late last year, outlining a C$101.4 billion ($81 billion) “growth plan” over three years, with nearly half of that spending coming in the first year.
“We have to finish the fight against COVID – and that costs a lot of money,” Finance Minister Chrystia Freeland told reporters, adding that hundreds of thousands of Canadians remain out of work because of the pandemic.
Liberal insiders expect Trudeau to seek an election later this year to try to secure a majority in parliament. The Liberals currently need the support of at least one other party to pass legislation, including the budget.
Opposition lawmakers were unimpressed with the budget. But the leader of the left-leaning New Democratic Party said he was not prepared to bring down the government over it.
“It is clearly irresponsible to have an election or in any way to trigger an election while we are in the midst of this third wave,” Jagmeet Singh told reporters. “The impact on people would be devastating and we are not going to do that.”
Erin O’Toole, who heads the official opposition Conservatives, said: “This is an election budget and a poor one at that.” His party trailed the Liberals by 37% to 29% in an Abacus Data poll published last week.
Business groups were pleased with the added certainty of finally having a full budget, but remained unsold on the need for a massive stimulus plan with the economy already set to surge later this year as pent-up demand is unleashed.
“There’s a lot of spending in a lot of programs. But the effects of all of those combined together for me is just a bit unsure,” said Robert Asselin, senior vice president of policy at the Business Council of Canada.
The deficit for the fiscal year that started on April 1 will be the second largest in recent decades, with the closely watched debt-to-GDP ratio hitting 51.2%, although Freeland promised a return to restraint as the economy gets back to normal.
“I think the key here is the debt-to-GDP (ratio) is expected to peak this year … and it’s expected to come down in the years ahead,” said Doug Porter, chief economist at BMO Capital Markets. “I think that’s a credible plan if they can stick to it.”
THIRD COVID WAVE
Trudeau’s Liberal government has been buoyed in opinion polls by its response to the COVID-19 pandemic. But a third wave of infections is pounding the country’s largest city, Toronto, and its suburbs – a key Ontario region for securing an electoral majority – and the coronavirus vaccine rollout has trailed other wealthy countries like the United States and Britain.
Of the nearly C$50 billion in new spending this year, C$27 billion is set aside to extend pandemic recovery measures like wage and rent subsidies for businesses and for a new program to help transition companies back to hiring.
The budget also aims to create a national childcare program and to make a more aggressive effort to reduce carbon emissions, both measures that polls show are important to Liberal voters.
While Freeland said historically low interest rates allowed significant investment, she also pledged to unwind deficits and reduce the debt-to-GDP ratio over the medium term. A senior government official said, however, that a fiscal anchor should not be seen as a “straitjacket.”
The official also said that the government had run stress tests on the accumulating debt and was confident of its abilities to service that debt even as interest rates rise in the future.
“It’s hard for us to draw a conclusion that we’re out over our skis. We don’t believe we are. We think we’re in very solid terrain,” the official told reporters.
Surging growth should also increase revenues, with 5.8% growth forecast for this year, after a 5.4% contraction in 2020.
The deficit in the current year is projected to hit C$154.7 billion, less than half that of the previous fiscal year, with total national debt soaring to C$1.23 trillion this year, up from C$1.08 trillion in the previous year.
The Canadian dollar steadied at about 1.2530 to the greenback, or 79.81 U.S. cents, after the budget was released. Canada‘s 30-year yield extended its rise, up 7.5 basis points at 2.060%.
($1 = 1.2526 Canadian dollars)
(Reporting by Julie Gordon; Additional reporting by David Ljunggren, Steve Scherer, Fergal Smith and Moira Warburton; Editing by Peter Cooney)
Quebec legislature member Youri Chassin has announced he’s leaving the Coalition Avenir Québec government to sit as an Independent.
He announced the decision shortly after writing an open letter criticizing Premier François Legault’s government for abandoning its principles of smaller government.
In the letter published in Le Journal de Montréal and Le Journal de Québec, Chassin accused the party of falling back on what he called the old formula of throwing money at problems instead of looking to do things differently.
Chassin says public services are more fragile than ever, despite rising spending that pushed the province to a record $11-billion deficit projected in the last budget.
He is the second CAQ member to leave the party in a little more than one week, after economy and energy minister Pierre Fitzgibbon announced Sept. 4 he would leave because he lost motivation to do his job.
Chassin says he has no intention of joining another party and will instead sit as an Independent until the end of his term.
He has represented the Saint-Jérôme riding since the CAQ rose to power in 2018, but has not served in cabinet.
This report by The Canadian Press was first published Sept. 12, 2024.
MONTREAL – NDP Leader Jagmeet Singh says he will not be taking advice from Pierre Poilievre after the Conservative leader challenged him to bring down government.
“I say directly to Pierre Poilievre: I’m not going to listen to you,” said Singh on Wednesday, accusing Poilievre of wanting to take away dental-care coverage from Canadians, among other things.
“I’m not going to listen to your advice. You want to destroy people’s lives, I want to build up a brighter future.”
Earlier in the day, Poilievre challenged Singh to commit to voting non-confidence in the government, saying his party will force a vote in the House of Commons “at the earliest possibly opportunity.”
“I’m asking Jagmeet Singh and the NDP to commit unequivocally before Monday’s byelections: will they vote non-confidence to bring down the costly coalition and trigger a carbon tax election, or will Jagmeet Singh sell out Canadians again?” Poilievre said.
“It’s put up or shut up time for the NDP.”
While Singh rejected the idea he would ever listen to Poilievre, he did not say how the NDP would vote on a non-confidence motion.
“I’ve said on any vote, we’re going to look at the vote and we’ll make our decision. I’m not going to say our decision ahead of time,” he said.
Singh’s top adviser said on Tuesday the NDP leader is not particularly eager to trigger an election, even as the Conservatives challenge him to do just that.
Anne McGrath, Singh’s principal secretary, says there will be more volatility in Parliament and the odds of an early election have risen.
“I don’t think he is anxious to launch one, or chomping at the bit to have one, but it can happen,” she said in an interview.
New Democrat MPs are in a second day of meetings in Montreal as they nail down a plan for how to navigate the minority Parliament this fall.
The caucus retreat comes one week after Singh announced the party has left the supply-and-confidence agreement with the governing Liberals.
It’s also taking place in the very city where New Democrats are hoping to pick up a seat on Monday, when voters go to the polls in Montreal’s LaSalle—Émard—Verdun. A second byelection is being held that day in the Winnipeg riding of Elmwood—Transcona, where the NDP is hoping to hold onto a seat the Conservatives are also vying for.
While New Democrats are seeking to distance themselves from the Liberals, they don’t appear ready to trigger a general election.
Singh signalled on Tuesday that he will have more to say Wednesday about the party’s strategy for the upcoming sitting.
He is hoping to convince Canadians that his party can defeat the federal Conservatives, who have been riding high in the polls over the last year.
Singh has attacked Poilievre as someone who would bring back Harper-style cuts to programs that Canadians rely on, including the national dental-care program that was part of the supply-and-confidence agreement.
The Canadian Press has asked Poilievre’s office whether the Conservative leader intends to keep the program in place, if he forms government after the next election.
With the return of Parliament just days away, the NDP is also keeping in mind how other parties will look to capitalize on the new makeup of the House of Commons.
The Bloc Québécois has already indicated that it’s written up a list of demands for the Liberals in exchange for support on votes.
The next federal election must take place by October 2025 at the latest.
This report by The Canadian Press was first published Sept. 11, 2024.
Montreal Mayor Valérie Plante is defending her decision to turn off comments on her social media accounts — with an announcement on social media.
She posted screenshots to X this morning of vulgar names she’s been called on the platform, and says comments on her posts for months have been dominated by insults, to the point that she decided to block them.
Montreal’s Opposition leader and the Canadian Civil Liberties Association have criticized Plante for limiting freedom of expression by restricting comments on her X and Instagram accounts.
They say elected officials who use social media should be willing to hear from constituents on those platforms.
However, Plante says some people may believe there is a fundamental right to call someone offensive names and to normalize violence online, but she disagrees.
Her statement on X is closed to comments.
This report by The Canadian Press was first published Sept. 11, 2024.
