Morneau Delivers Economic Update

Finance Minister Bill Morneau has delivered his economic update detailing the projections of his government’s response to COVID-19 pandemic. The update includes a $343.2 billion deficit; the highest it’s been since World War II.

“The COVID-19 pandemic has had a major impact on the social and economic well-being of Canadians in every part of the country. For many it has meant lost jobs, lost hours, and lost wages. Or government has understood, from the moment this pandemic began, it was our role to step in and support Canadians and stabilize the economy,” Finance Minister Bill Morneau said.

The highlights:

• The debt to GDP ratio will rise to 49% in 2020-2021 from a projected 31%.
• The cost of the Canada Emergency Business Account (CEBA) is estimated to be approximately $13.7 billion by the time it ends. The Canada Emergency Wage Subsidy (CEWS) is estimated to cost $82.3 billion, an increase from $45 billion over government estimates issued by the government in April.
• The Canada Emergency Response Benefit (CERB) is expected to cost an estimated $80 billion

Outgoing Conservative Leader Andrew Scheer reacted by attacking the deficit. “Today was an opportunity to reverse course and put Canadians first. Instead, Justin Trudeau once again put the Liberals first,” he said in a statement. The Conservatives are proposing to make the CERB more flexible. They would use it to help workers transition back into the workforce. Unemployment rose to 13% in May, the highest increase on record. In January unemployment was 5%

The NDP meanwhile is calling for the adoption of a suggestion from the Parliamentary Budget Officer to place a 1% tax on those with over $20 million in assets. “We have an opportunity to do things differently. We can stop the very rich and large corporate CEO’s from using offshore tax havens, we can make the ultra-wealthy pay just a little bit more, and we can build a fair system for everyone across the country,” Finance Critic Peter Julian said.

“This is truly the challenge of our lifetime,” Morneau said. For more information visit the Department of Finance’s website