Canada’s minority Liberal government unveiled on Monday its first budget in two years, promising to invest federal funds in a national childcare program, establish a federal minimum wage of $15 per hour, support people and businesses through the pandemic and create a greener economy.
But Finance Minister Chrystia Freeland’s federal budget projects a deficit of $154.7 billion in the new fiscal year, which will then gradually decline to $30.7 billion in 2025-26.
That’s on top of the $354.2 billion dollars in deficit spending the federal government racked up in the 2020/21 fiscal year. Canada’s net debt now stands at over $1 trillion for the first time in history.
“This budget is about finishing the fight against COVID. It’s about healing the economic wounds left by the COVID recession. And it’s about creating more jobs and prosperity for Canadians in the days and decades to come,” Freeland said in prepared remarks from her budget speech in the House of Commons on Monday.
The 739-page budget titled “A Recovery Plan for Jobs, Growth, and Resilience” commits up to $30 billion over five years to build a “high-quality, affordable and accessible early learning and child care system across Canada.”
“Here is our goal,” Freeland said. “Five years from now, parents across the country should have access to high quality early learning and child care, for an average of $10 a day.”
The budget also proposes to extend the wage subsidy, rent subsidy, and Lockdown Support for businesses and other employers until Sept. 25, 2021, for an estimated total of $12.1 billion in additional support, Freeland said.
The budget allocates $17.6 billion for the green recovery and sets out a plan to help achieve GHG emissions reductions of 36 per cent from 2005 levels by 2030, and puts Canada on a path to achieve net-zero emissions by 2050, she said. In addition, the budget allocates funding to achieve Canada’s commitment of 25 per cent land and marine conservation targets by 2025, she added.
Along with spending, the budget also envisages new revenue streams, including from taxing Internet giants for their profits in Canada, taxes on luxury cars, planes and boats, and Canada’s first national tax on vacant property owned by non-resident, non-Canadians.
“Homes are for Canadians to live in,” Freeland told reporters earlier today. “They are not assets for parking offshore money and this tax measure will work to ensure that that is the case.”
The government will need to get at least one opposition party to support it to avoid a pandemic election this spring.
With files from CBC News and The Canadian Press
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