Ottawa foresees a record deficit of 343,2 billion$ [VIDEO]

The minister of Finance, Bill Morneau was presented a portrait of the economy and of public finance in Ottawa on Wednesday.

8 July 2020 14: 21

Updated at 17h52

Ottawa foresees a record deficit of 343,2 billion$ [VIDEO]

Catherine Lévesque

The canadian Press

Ottawa anticipates that the federal deficit will be 343,2 billion $ for the fiscal year 2020-2021.

This is what emerges from the “portrait” of the economy and public finance presented by the minister of Finance, Bill Morneau, Wednesday afternoon.

This is the deficit the most important in the history of Canada. This figure is largely due to government programs to help individuals and businesses through the pandemic COVID-19.

Speaking to the media on Wednesday afternoon, the minister Morneau said he is well aware of the magnitude of the deficit associated with his name, but did not appear to be destabilized in the face of this observation.

“What was the other choice?” replied the grand treasurer of the country in response to a reporter who questioned about it.

“We really are in an extraordinary situation where it is absolutely necessary to protect people, to protect the jobs for the future of our country. We have made the investments because it was necessary and in this way, we are going to have an economy that is in the future for us and for our children,” he insisted.

The “portrait” economic plans to 212 billion $ in direct support to workers and enterprises, in 19 billion $ in support for the health and safety of Canadians and 85 billion $ in the form of deferrals of tax payments, taxes and customs duties.

The minister Morneau has confirmed that the government intends to accelerate the transition of the Provision of canadian emergency (PCU) to the wage Subsidy emergency of Canada (SSUC), for those who have jobs, and the return to employment insurance, for those who will not.

“The PCU will decrease, the wage subsidy is going to increase in importance and the employment insurance system will start again”, he summarized.

In its paper, the federal government has projected that it will cost no more than $ 80 billion for the SFP, which offers $ 500 per week for people who have lost their income due to the COVID-19. The program has recently been extended from 16 to 24 weeks for the providers.

Dated as of June 28, more than 53 billion $ had been paid by PCU to some 8,16 million individuals.

The wage subsidy, by comparison, has been much less popular. The most recent figures show $ 18 billion paid in the framework of this program, while the federal government is expected to pay 82,3 billion dollars to eligible employers, according to its “portrait” unveiled Wednesday.

Mr. Morneau said that one in four employees in the private sector benefits from the wage subsidy and is confident that this figure will increase with the “changes” that will be announced in the next few days.

This portrait, revealed on Wednesday was the first glimpse of the public finances since the update of economic and fiscal 2019. The minister of Finance has not committed to file a budget in good and due form this year, finding the situation too fluid.

It has, however, ruled out the option of austerity to control the extent of the deficit.

“Our approach is going to be an investment in the future and not the cuts and changes in our tax system. Really, this is the time to consider how we can ensure a level of growth”, he said.

Reactions

“We didn’t expect anything grand, but the government has managed to disappoint us,” responded Gabriel Ste-Marie, a spokesperson for the Bloc québécois in the field of finance, after the submission of the document of 186 pages.

Like the other opposition parties, the bloquistes were hoping that the federal government presents a plan more specific to the recovery of the economy in particular, and that he shares his plans in the event that it would change the existing support programmes.

“As they say, the devil is in the details. We, what we want is that the people who can’t work because of the pandemic have support, ( … ), but at the same time, we want an incentive to return to employment”, has launched Mr. Ste-Marie.

“The “picture” presented today clearly shows that Justin Trudeau has no plan to help Canadians return to work or to revive our economy,” responded Andrew Scheer, leader of the conservative Party, Wednesday afternoon.

Mr. Scheer believes that the liberals would have had to offer, as proposed by the conservatives, a “premium return-to-work”. The bloquistes are also in favour of this idea, which would be to retain 50 cents of the PCU for each dollar earned at work above and beyond $1,000.

This is a claim oft-repeated by the business world, which considers that the PCU in its current form represents a barrier to the economic recovery.

The Fédération des chambres de commerce du Québec (FCCQ) considers that it is essential to review the criteria surrounding eligibility for the PCU and the PCUE for students and says that he is still waiting for the new eligibility criteria surrounding the wage subsidy to enterprises.

“We understand that this is an extraordinary crisis that requires public spending colossal to get through this crisis and be able to bounce back. Now, be sure to take the necessary measures in the economic recovery,” said Charles Billion, president and ceo of the FCCQ.

The new democrats would have rather liked to see in this “portrait” of the economy a commitment to the fight against tax evasion and a tax imposed for the wealthy to generate more revenue to the State.

Peter Julian, a spokesman for the neo-democratic party in matters of finance, has also complained that the aid promised for people with disabilities has not yet seen the light of day, despite promises in this regard. The measure is included in the document of the federal government.

The Fédération des travailleurs et travailleuses du Québec (FTQ), for its part, welcomed the measures taken up to now, but has said that they do not have “an unlimited life”.

“The social crisis has shown that our social safety net is not sufficient to support the most vulnerable members of society. It is high time to think about the issue of income support when Providing canadian emergency and the wage Subsidy emergency in Canada will end,” noted the secretary-general of the FTQ, Denis Bolduc.

The spokesperson for the canadian taxpayers Federation, Aaron Wudrick, for its part, has said on social networks that his organization will have to find a new meter to calculate the federal debt, which will exceed the 1000 billion $ in the next year, since his machine can’t display as many digits.

The minister of Finance Bill Morneau will present a portrait of the country’s economy – July 8, 2020

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