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The Canadian government tabled its expenditure plans on Monday evening to fight against the COVID-19 pandemic and reenergize the economy amid a coronavirus crisis. As projected by some analysts, Liberals’ federal budget focused on daycare and housing sectors.
Here’s a broad outlook of the stimulus allocation:
- National child care system
The largest allocation of nearly C$ 30 billion to build a federal childcare system, providing spots that charge parents C$ 10 a day, in the same line with an existing program in Quebec province that has been applauded for inspiring more women to enter the workforce.
- Real Estate
The Federal Finance Minister Chrystia Freeland earmarked C$ 2.5 billion plus a reallocated $1.3 billion to build 35,000 affordable housing unit. Housing measures could boost real estate stocks rally further. The housing sector grew 21.6 per cent month-on-month (MoM), setting a record, according to the Canadian Mortgage and Housing Corporation data. - Health Care
The Finance Minister allocated a long-term health care spending worth C$ 3 billion to cope up with the ongoing pandemic crisis across the country. While worst-hit businesses have received a C$ 2.2-billion allocation for the next five years. - Green Economy
The financial document also outlined Liberals’ pledge for zero-emission as FM Freeland aimed at building a green economy and enable more clean energy initiatives. Trudeau government dedicated C$ 15-billion spending for public transit infrastructure, including new subway lines and electric buses. The Federal Finance Minister said that the government is infusing targeted investment (C$ 2.75 billion over five years) in zero-emission and green transformation initiatives.
- SMEs & Entrepreneurs
Helping small and medium-sized enterprises (SMEs) digital adoption programs and supporting via C$1.5-million capital investments. Another C$300 million initiative to support women, Black Canadians, and other underrepresented entrepreneurs. This accounts for C$2.2 billion-investment over the next five years.
- Tourism
The 2021 budget proposed C$1 billion initiative to support one of the worst hit sectors amid pandemic. - Supporting Indigenous Groups
Landmark investment of C$18+ billion to bridge the gaps between Indigenous and non-Indigenous peoples.
Image Source: ©Kalkine Group 2021
In addition to the historic federal support and financial aids to enterprises and households, the total fiscal deficit for 2020-21 was at C$ 354.2 billion against the previous year’s estimation of C$ 380 billion.
Freeland’s fiscal guardrail agenda would be very important for the current fiscal year ahead of mounting spending because the debt-to-GDP was 16.1 per cent for the last fiscal year.
The federal government should act to normalize the figure and sketch a plan to reduce it in the upcoming years. While presenting the federal budget, the Canadian Finance Minister anticipated a declining debt-to-GDP trajectory by 2025-26 and provided with a target of 1.1 per cent.
