Minister of Finance Chrystia Freeland delivers the 2020 fiscal update in the House of Commons on Parliament Hill in Ottawa on Monday, Nov. 30, 2020. THE CANADIAN PRESS/Sean Kilpatrick

Minister of Finance Chrystia Freeland delivers the 2020 fiscal update in the House of Commons on Parliament Hill in Ottawa on Monday, Nov. 30, 2020. THE CANADIAN PRESS/Sean Kilpatrick

Feds to table 2021 budget on April 19: Freeland

It will be the first federal budget in more than two years

The federal government will release a highly anticipated budget in about four weeks, giving Canadians a detailed accounting of pandemic spending and how the Liberals plan to spend billions more on the road out of COVID-19.

Finance Minister Chrystia Freeland announced Tuesday the federal Liberals will table a budget on April 19.

It will be the first federal budget in more than two years, after the government opted not to introduce one in 2020 as the COVID-19 pandemic took hold in Canada.

It will also be Freeland’s first budget as finance minister; she took on the portfolio last summer following Bill Morneau’s resignation.

Freeland said the government went into the pandemic with strong finances, which allowed it to provide unprecedented support to Canadians.

“We will continue to do whatever it takes to support Canadians and Canadian businesses,” Freeland told the House of Commons Tuesday.

“And we have a plan for jobs and robust growth.”

The budget is expected to provide a full accounting of all government spending through the pandemic, which has sent the deficit for the fiscal year to almost $400 billion.

It is also expected to outline the Liberals’ plan to spend between $70 billion and $100 billion over the coming years in fiscal stimulus to help the economy recover.

Goldy Hyder, president of the Business Council of Canada, said in a statement that the government needs to provide economic hope to Canadians with an end in sight to the pandemic.

“To build confidence, the federal government must present a comprehensive and credible plan that spurs investment, private-sector job creation, and long-term economic growth,” he said.

The government will need to get the support of at least one major opposition party to pass its budget. Failure would mean the government falls and would almost certainly provoke a federal election.

Conservative Leader Erin O’Toole, in a statement, said the government has left far too many Canadians behind during the pandemic.

He contrasted Liberal policies with those his own party would unveil, saying he would focus on “growth in every sector of the economy and in every part of the country.”

The government has previously said this year’s budget will include measures to create a national child-care system, invest in skills training and help green the economy.

Additional measures pitched by departments have faced a simple question: how much economic growth can this buy?

The budget is likely to include spending on traditional areas like infrastructure, including for public-sector projects that could act as a catalyst for private projects, said Deloitte Canada chief economist Craig Alexander.

But he also noted that spending on social programs could also provide an economic boost in the short and long term, pointing specifically to child care.

By Alexander’s estimates, governments receive between $1.50 and $6 for every dollar invested in child care, suggesting it can help break down economic barriers by raising labour-force participation rates for parents, and mothers in particular.

“I don’t think the economy needs the government to just go and spend money on things that would just accelerate economic growth in 2021,” Alexander said in an interview.

“What we need is strategic investments that will provide a boost to the economy over the medium to long term.”

The budget will be the first one since March 2019 after the government opted not to introduce one in 2020, pointing to the uncertainty the pandemic had caused to the domestic and global economic outlook.

Freeland asked the Finance Department in the fall to detail the difference between a budget and a fall economic statement.

A footnote in the responding briefing note, a copy of which The Canadian Press obtained under the Access to Information Act, said “while a budget is typically presented every year, the government is under no obligation to do so.”

Freeland delivered an economic statement in late November, which pegged the deficit at $381.6 billion this year, but closing in on $400 billion if widespread lockdowns caused demand for aid to increase again. The federal debt was likely to top $1.2 trillion.

The Liberals argue the debt is manageable because economic growth should outpace interest rates, meaning more money coming in than the federal treasury will have to pay out over time.

A report Tuesday from the C.D. Howe Institute said the fiscal sustainability the Liberals outline is possible, but far from guaranteed.

If repayments are bigger than economic growth, that could mean spending cuts, tax increases or a combination of the two may be needed to keep deficits from spiralling.

The think-tank’s paper argued for the government to cut business subsidies that don’t address a clear market failure. If tax increases are necessary, the think tank said taxes on business investment should be avoided because they drive capital overseas and could push down wages here.

federal budgetFederal Politics

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A grass fire west of Williams Lake, seen here Tuesday, is considered to be being held by members of the BC Wildfire Service. (Photo submitted)
An Interior Health nurse administers Pfizer-BioNTech COVID-19 vaccines to seniors and care aids in Kelowna on Tuesday, March 16, 2021. (Phil McLachlan/Kelowna Capital News)
105 new COVID-19 cases in Interior Health

Just over 8,000 new vaccine doses administered in the region for a total of 158,000 to date

A grass fire sparked by embers from a fire pit quickly spread to the home of Cliff and Lydia Trudeau. (Barb Trudeau photo)
Fire destroys home of elderly couple at Cuisson Lake, near McLeese Lake

Fast-moving grass fire burns house to the ground

The public is being asked to use caution when doing backyard burning in the Cariboo Fire Centre. (File photo)
Caution urged with outdoor burning says Cariboo Fire Centre

Anyone conducting burning must ensure adequate resources are on hand to stop fire from spreading

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Demonstrators at the legislature on April 14 called on the province to decriminalize drug possession and provide widespread access to regulated safe supply across B.C. (Jake Romphf/News Staff)
Rally calls for decriminalization, safe supply on 5th anniversary of overdose emergency declaration

From 2016 to the end of February, 7,072 British Columbians died due to overdose

(Government of Canada)
Liberal MP caught stark naked during House of Commons video conference

William Amos, in Quebec, appeared on the screens of his fellow members of Parliament completely naked

Provincial health officer Dr. Bonnie Henry updates B.C.’s COVID-19 situation at the B.C. legislature, Feb. 1, 2020. (B.C. government)
B.C.’s COVID-19 case count jumps to 1,168 Wednesday, nearly 400 in hospital

Now 120 coronavirus patients in intensive care, six more deaths

Moss covered branches are seen in the Avatar Old Growth Forest near Port Renfrew on Vancouver Island, B.C. Thursday, Sept. 29, 2011. THE CANADIAN PRESS/Jonathan Hayward
B.C. blockades aimed at protecting old-growth forests reveal First Nation split

Two Pacheedaht chiefs say they’re ‘concerned about the increasing polarization over forestry activities’ in the territory

Richmond RCMP Chief Superintendent Will Ng said, in March, the force received a stand-out number of seven reports of incidents that appeared to have “racial undertones.” (Phil McLachlan/Capital News)
‘Racially motivated’ incidents on the rise in B.C’s 4th largest city: police

Three incidents in Richmond are currently being invested as hate crimes, says RCMP Chief Superintendent Will Ng

Commercial trucks head south towards the Pacific Highway border crossing Wednesday (April 14, 2021). The union representing Canadian border officers wants its members to be included on the frontline priority list for the COVID-19 vaccine. (Aaron Hinks photo)
CBSA officers’ union calls for vaccine priority in B.C.

Border officers at ports including, YVR and land crossings should ‘not be left behind’

A still from the video taken of a violent arrest on May 30, 2020 in downtown Kelowna. (File)
Kelowna Mountie charged with assault for caught-on-camera violent arrest

Const. Siggy Pietrzak was filmed punching a suspected impaired driver at least 10 times during an arrest

Most Read