OTTAWA—Today’s fall economic statement shows that the federal government still has significant room to spend in the fight against COVID-19 and move ambitiously toward a public-led recovery for all Canadians, says the Canadian Centre for Policy Alternatives (CCPA).
The fiscal update posts a deficit track lower than previously projected. The document proposes nearly $30 billion in new COVID-19 spending as concerns increase over the Omicron variant. It nevertheless steers clear of a robust slate of recovery-focused measures amid inflationary pressures this fall.
“Ottawa must resist the urge to cut back supports when inflation is largely being driven by four key items—gasoline, houses, cars and meat—and is set to correct itself in the coming months,” says David Macdonald, CCPA Senior Economist.
“The rapid economic recovery has predictably refilled federal government coffers. Deficit concerns should now be rapidly receding as pandemic benefits positioned us well for renewed growth. Now is the time to ride this wave of extremely low interest rates to rebuild our social safety net. Unfortunately, the fiscal update falls short on new long-term proposals—Canadians will have to look to the 2022 budget for those investments,” Macdonald notes.
“Canada was caught flat-footed when the pandemic hit. Our health and social security systems are still struggling to keep up even as the new Omicron variant is spreading rapidly,” explains Katherine Scott, CCPA Senior Researcher. “This fiscal update is a missed opportunity to move forward decisively with a comprehensive recovery plan that leaves no one behind.”
“As expected, the federal fiscal position has improved since the spring budget. But the government only signalled selected investments in COVID-19 spending, B.C. recovery efforts, and First Nations child welfare. Concrete actions to boldly address systemic inequalities exposed and amplified by COVID-19 have been put off for another day.”
“Additional monies were flagged to assist seniors living in poverty who are facing tremendous financial hardship through a reduction in their seniors’ benefit as a result of having applied to the Canada Emergency Response Benefit. These people have not shared in Canada’s recovery and are now facing higher costs of living.”
“Climate action has been pushed to the backburner by this government early in its renewed mandate,” says Hadrian Mertins-Kirkwood, CCPA Senior Researcher. “A new climate plan promised by the end of the year was recently delayed until March, and this update offers no new climate policy despite highlighting the rising costs of climate-related extreme weather events. We’re left waiting until budget time for real action, at a moment when every month counts.”
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To arrange interviews, contact: Jolson Lim, communications specialist, at [email protected] or cell at (613) 413-0945.
The CCPA is an independent, non-profit charitable research institute founded in 1980.