Trudeau govt. to spend over $100 billion on economic recovery, create $10 a day child care

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Budget 2021: A Recovery Plan for Jobs, Growth, and Resilience was tabled on Monday afternoon by Deputy Prime Minister Chrystia Freeland who is also Canada’s first female Minister of Finance. 

The Federal Liberal’s financial road map to bring the country’s pandemic-battered economy back on track expects to spend over 101.4 billion over three years in proposed investments that will create good jobs, finish the fight against COVID-19 and and “ensure a robust economic recovery that brings all Canadians along”.

“This budget is about finishing the fight against COVID-19. It’s about healing the wounds left by the COVID-19 recession,” said Chrystia Freeland. “And it’s about creating more jobs and prosperity for Canadians in the days—and decades—to come.”

What stood out amidst the Trudeau government’s proposal to extend a number of pandemic benefits was a promise to establish a low-cost national early learning and child care system in partnership with provincial, territorial, and Indigenous partners.

This plan will aim to reduce fees for parents with children in regulated child care by 50 per cent on average, by 2022, with a goal of reaching $10 per day on average by 2026, everywhere outside of Quebec. The budget proposes new investments totalling almost $30 billion over the next five years and $8.3 billion ongoing to support this vision.

Other highlights include:

  • Extending the Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy and Lockdown Support until September 25, 2021.
  • Extending the number of weeks available for  income support for Canadians such as the Canada Recovery Benefit and the Canada Recovery Caregiving Benefit.
  • Enhancing Employment Insurance sickness benefits from 15 to 26 weeks.
  • Increasing Old Age Security for seniors age 75 and older to provide them with better financial security.
  • A new Canada Digital Adoption Program that will assist over 160,000 businesses with the cost of new technology. And it will provide them with the advice they need to get the most of new technology with the help of 28,000 young Canadians who will be trained to work with them.
  • Allowing Canadian small businesses to fully expense up to $1.5 million in capital investments in a broad range of assets, including digital technology and intellectual property. This represents an additional $2.2 billion investment in the growth of Canada’s entrepreneurs over the next five years.
  • Revitalizing Canada’s tourism sector through $1 billion to help tourism businesses recover and support festivals and cultural events that provide jobs and growth in many of our cities and communities.
  • Supporting women, Black Canadians, and other underrepresented entrepreneurs who face barriers to launching and owning businesses through $300 million to enhance initiatives like the Black Entrepreneurship Program and the Women Entrepreneurship Strategy.
  • Establishing a $15 federal minimum wage.
  • Enriching the Canada Workers Benefit, which will support about 1 million more Canadians and lift nearly 100,000 people out of poverty. This will result in additional support of $8.9 billion over six years for Canada’s low-wage workers.
  • Helping to build, repair, and support 35,000 affordable housing units for vulnerable Canadians through an investment of $2.5 billion and a reallocation of $1.3 billion in existing funding.
  • Investing $17.6 billion in a green recovery that will help Canada to reach its target to conserve 25 per cent of Canada’s lands and oceans by 2025, exceed its Paris climate targets and reduce emissions by 36 per cent below 2005 levels by 2030, and move forward on a path to reach net-zero emission by 2050.
  • Closing the gaps between Indigenous and non-Indigenous peoples, supporting healthy, safe, and prosperous Indigenous communities, and advancing meaningful reconciliation with First Nations, Inuit, and the Métis Nation through an historic investment of over $18 billion. 

Canada entered the pandemic in a strong fiscal position, said the Federal Liberals. This allowed the government to take quick and decisive action, supporting people and businesses, and put it in the position to make historic investments in the recovery. Recovery has been uneven to date as Canada has now faced three waves of the virus. Budget 2021 is committed to reducing the federal debt as a share of the economy over the medium-term and unwinding COVID-19-related deficits. This framework is prudent and sustainable, with the federal debt-to-GDP ratio expected to fall to 49.2 per cent by 2025-26 and the deficit to reach 1.1 per cent of GDP that same year, a lower deficit ratio than was forecast—in December 2019 prior to the onset of COVID-19—for 2019-20 and 2020-21.

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