Deputy Prime Minister and Minister of Finance Chrystia Freeland tabled the government’s much-anticipated Fall Economic Statement on Nov. 30. This is the second update the government has provided on Canada’s financial situation since the COVID-19 pandemic began and its first spending plan since the 2019 election.
In July 2020, the last update projected the federal deficit would be a record $343.2 billion, but in light of recent spending announcements, that deficit is expected to reach $381.6 billion. The major announcements coming from the spending plan concern support for some of Canada’s hardest-hit industries, such as tourism and hospitality; support for long-term care homes; support to help women return to work; and stimulus spending on infrastructure.
On infrastructure, the government proposed various investments, from $500 million for extensive airport infrastructure to $1.5 billion to lift all long-term drinking water advisories in First Nations communities, to an extra $750 million to the Universal Broadband Fund on top of the $1 billion already committed. While the government did not speed up investments through the $120 billion Investing in Canada plan, the Fall Economic Statement does take a step in the right direction by supporting infrastructure in Canada and stimulating the economy.
The Fall Economic Statement will go through the regular legislative process and be a confidence vote for the Liberal government, but it is not expected to receive enough votes to pass. This “mini-budget” comes at a time when COVID-19 is resurging across Canada, and though it included investments in different areas, it still does not go in-depth enough to support Canada’s economic recovery fully. As vaccines begin to be distributed and COVID-19 cases start to drop, the government will likely have a larger stimulus plan in its upcoming budget, which is likely to be tabled in early to mid-2021.
AED continues to advocate for critical measures that would have a real impact on employment creation and economic growth. This includes increasing the Accelerated Investment Incentive for new and used equipment from 45% to 100%, earmarking more dollars in the Investing in Canada plan for the near term, and continuing promotion of the skilled trades as a first-choice career. Among others, these recommendations will support the heavy equipment sector, which is already driving economic growth and employment creation. Their inclusion in Budget 2021 would be a vote of confidence in a sector that is ready to rebuild Canada’s economy.