Today, the Deputy Prime Minister and Minister of Finance Chrystia Freeland delivered the Fall Federal Fiscal update. This update reports a deficit of $327.7 billion for the last fiscal year and $144.5 billion for this fiscal year. This compares favourably to their forecast of $354.2 billion and $154.7 billion, respectively, in the April budget.
“When examining the overall debt to GDP ratio, we are still on par or better off than many other countries affected by the pandemic such as Japan and the United States,” said Anita Huberman, President & CEO, Surrey Board of Trade. “The Minister indicated that we are back on track, however, we need to ensure that supply chains are fortified, that infrastructure investments are made now to create sustainable jobs, and that any transportation planning that takes effect in the next 3-4 years remains unchanged.”
“We need an economic growth plan, which was missing in this update. Additionally, we did not hear about a review of Canada’s tax system, which is long overdue.”
What we heard:
– Pediatric vaccines for those over the age of 5 are free, and so are the boosters
– Investment in anti-viral drugs and ventilator technology in schools and businesses to prevent hospitalization
– $1.7 Billion to precure an additional 180 million rapid tests
– Additional support for provinces and territories for proof of vaccination credentials
– Local lockdown support to help local public health officials to make difficult decisions especially in light of the Omicron variant
– 10 days of paid sick leave for federal employees
– $4.5 billion to pay for other surges, and income and business supports
– Canada has seen over 106% of jobs recovered compared to those lost at the peak of the pandemic
– The size of the Canadian economy this year will be $2.48 trillion
– Canada posted a $25.1 billion surplus in trade in goods in October
– 6, 000 more active businesses compared to pre-pandemic levels
– Households saw a 7% increase in income
– Provinces were able to have sheltered balance sheets because of Federal support.
– $8 out of $10 provided to fight COVID came from the Federal government
– Canada has the second lowest mortality rate in G7 countries
– Inflation is a global phenomenon that was driven due to spending habits of individuals during economic and health lock downs
– Supply chain rectification will occur through a $50 million call for proposals to help ports acquire cargo capacity and relieve supply chain congestion
– Monetary policy: a 2% inflation target was mandated to the Bank of Canada
– Child benefit and other benefits will be indexed to inflation
– debt relief to students who need to repay the Canada Emergency Response Benefits
– $60 million fund for performing arts resilience
– $30 billion in early learning and childcare investments for a national system of Early Childhood Education, which will be implemented in the next 5 years
– We will see 411,000 new immigrants in 2022 with a plan to reduce processing time for permanent and temporary resident and citizenship applications through an investment of $85 million
– Housing – more actions will be released in budget 2022
– A national tax on vacant property owned by non-Canadians and non-residents
– Deadline extension for small businesses for the repayment of Canada Emergency Business Account loans
– Ensure that seasonal workers who received pandemic benefits can still qualify for the EI Seasonal Workers Pilot Project
– Moody’s and S&P reaffirmed Canada’s Triple-A credit rating
– Debt-to-GDP ratio in the last fiscal year was 47.5%
– 45% of bond issuance would be long-term debt of 10 years or more
– For First Nation children and their families, the government has provisioned $20 billion for compensation and $20 billion to improve the system going forward.
“The Surrey Board of Trade sees that we are in a decent position to rebound from the economic downturn of 2020 and 2021. We will continue to monitor the fiscal situation to ensure that services and investments are made efficiently, effectively, and in a timely manner.”
Read the full 2021 Fiscal Update https://budget.gc.ca/efu-meb/2021/report-rapport/EFU-MEB-2021-EN.pdf
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Anita Huberman, 604-634-0342, anita@businessinsurrey.com
