First budget in two years
OTTAWA — Canadian Finance Minister Chrystia Freeland said on Tuesday the first federal budget in two years, which will be presented on April 19, would offer the support that is needed to those struggling during the pandemic, plus a plan to boost growth.
“We will continue to do whatever it takes to support Canadians and Canadian businesses. And we have a plan for jobs and robust growth,” Freeland said when she announced the date during Question Period in the House of Commons.
The Liberal government did not pass a budget last year because it said the outbreak of the COVID-19 pandemic, during which the federal government provided billions of dollars in aid, made it impossible to predict how much spending would be needed.
But in a fiscal update in November, Prime Minister Justin Trudeau said that once the virus was under control, the government would invest up to $100 billion (US$79.6 billion) over three years to “jump-start” the recovery.
After Canada’s economy declined 5.4 per cent last year, the International Monetary Fund (IMF) sees the country’s economic growth rebounding 4.4 per cent this year. The government has said the first instalment of the stimulus promised in November will be in the budget.
That stimulus will end once the economy has recovered, at which point Canada will resume a “prudent and responsible fiscal path,” the Finance Department said in November.
Also in November, the government forecast the budget deficit would hit a historic $381.6 billion (US$304 billion) during the current fiscal year, which wraps up at the end of this month. Canada’s fiscal year runs from April through the following March.
The IMF has urged Canada to adopt a “fiscal anchor” to guard the credibility of the government’s management of the public accounts.
The federal debt as a percentage of GDP will peak at 52.6 per cent in 2021-22, then decline in subsequent years, the government said in November.
© Thomson Reuters 2021