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Archived - Foreword

As we battle COVID-19, Canadians are in for a hard winter. But we know that spring will surely follow.

That is because we have a plan. We understand what we must do to get through the dark months ahead. And then, to bring our economy roaring back. 

Across our country, we are now fighting an aggressive second wave of the virus. Every life lost to this disease is one life too many. That is why we must redouble our public health efforts, and not stop until COVID-19 is beaten. We can get through this, if we work together. There is no choice between our health and the economy. The two go hand in hand.

To see people through this crisis, Canadians and Canadian businesses now have access to a broad set of federal government measures. Our ability to treat the disease continues to evolve. Safe, effective and plentiful vaccines are around the corner. And the Government of Canada has a rigorous, multi-year plan, outlined in this document, to rebuild our economy once the virus is behind us.

Our strategy is clear: We will do whatever it takes to help Canadians through this crisis. We will invest in every necessary public health measure. We will support Canadians and Canadian businesses, in a deliberate, prudent and thoughtful way. And we will ensure the Canadian economy that emerges from this pandemic is more robust, inclusive and sustainable than the one that preceded it, with a stronger, more resilient middle class.

Let that be a legacy of, and a testament to, the sacrifices made by so many Canadian families this year.

Fighting COVID-19 and Supporting Canadians through the Pandemic

From the beginning of this pandemic, the Government of Canada has used every tool available and done everything in its power to crush the virus and mitigate its economic harm. Eight out of every ten dollars spent in Canada to fight COVID-19 and support Canadians has, so far, been spent by the federal government. The government has procured more than two billion pieces of personal protective equipment (PPE), and has assembled a comprehensive, world-leading portfolio of vaccine candidates.

To date, Canada has invested more than $1-billion in vaccine agreements to secure a domestic supply of seven promising vaccine candidates. In fact, Canada has secured the most diverse and extensive vaccine portfolio of any country in the world. Every Canadian can be confident that a safe and effective vaccine will be available to them and their family, free of charge.

Working with the provinces and territories, we have sought to grow our healthcare capacity, scale up testing and tracing, and provide direct support to provinces and territories to battle the virus. It has been a true Team Canada effort.

In the spring, the Canadian Armed Forces were deployed to long-term care facilities in Ontario and Quebec, in an all-out effort to protect seniors’ health and save lives. To help stop the spread of the virus in vulnerable communities, we worked with cities and communities to ensure that voluntary isolation sites were available as an alternative to crowded housing. The Canadian Red Cross and the Canadian Armed Forces continue to be deployed across the country.

In addition to these health measures, we have put in place powerful economic support measures to help people and businesses of all sizes weather this storm. Together, these form a comprehensive and complementary safety net, which will be in place through to the summer of 2021, offering economic certainty to Canadians and Canadian businesses in a turbulent and difficult time.

When the virus first hit, the Canada Emergency Response Benefit (CERB), the Canada Emergency Wage Subsidy and the Canada Emergency Business Account (CEBA) were quickly developed and rolled out. Canadians were able to bend the curve and protect our frontline healthcare workers and systems by staying home. The CERB supported people to pay their rent or mortgages, stay on top of their bills and put food on the table. The wage subsidy supported workers to stay connected to their jobs, and along with CEBA, helped small businesses remain open as we got through the first wave of the pandemic.

Beyond the initial emergency response, the government announced broader programs to support Canadians and businesses through an anticipated second wave. The Canada Recovery Benefit, the Canada Recovery Caregiving Benefit, the Canada Recovery Sickness Benefit and enhanced Employment Insurance were announced in August and will be in place until the fall of 2021.

The programs our government has launched, so far, have been a lifeline for Canadians and Canadian businesses.  And Canada is leading among our international peers. Federal support for Canada’s labour market has helped Canadians get back to work more quickly than their counterparts in the United States.

This month, the government extended the Canada Emergency Wage Subsidy through to June 2021 and launched new support measures for businesses, with the new Canada Emergency Rent Subsidy for tenants and property owners and new Lockdown Support of an additional 25 per cent, where a shutdown is required by public health orders.

Crucially, these measures are targeted and flexible. They focus on those in greatest need. They are also an essential complement to our health care response. These measures allow people and businesses to do the right thing, with the comfort and security of knowing they don't have to choose between public health and putting food on the table. Our commitment to employee sick leave and to supporting businesses where localized shutdowns have been ordered are examples of this approach.

In this Fall Economic Statement, with the second wave upon us, we are taking additional steps to support Canadians and Canadian businesses. We are providing new resources to combat the spread of the virus in long-term care facilities, making additional investments in PPE and preparing for the largest vaccination mobilization in Canada’s history.

With winter ahead, we are providing new resources to help improve ventilation in public buildings. We are also raising the maximum wage subsidy rate back to 75 per cent. We are doing this because we know that for many businesses the early months of any year are usually the toughest in the business calendar. This year will be even harder than normal. Our government is also creating a new stream of support for businesses that have been the hardest-hit in this crisis, creating a credit program with 100 per cent government-backed loan support and favourable terms for businesses that have seen their revenue significantly decline as people stay home to fight the spread of COVID-19.

COVID-19 has been devastating. But Canadians can rest assured that the Government of Canada has their backs and will be there to help us all get through this crisis. We will do whatever it takes — for as long as it takes — to weather the storm.

Building Back Better: A Plan to Fight the COVID-19 Recession

While the fight to control the virus continues, there is now light at the end of the tunnel. After winter comes spring. The strong and decisive action we have taken – to protect Canadians’ health and save our jobs and businesses – will help us recover from the COVID-19 recession and prevent the long-term economic scarring that would delay and weaken our post-pandemic recovery.

We have a plan for growth. When the virus is under control and our economy is ready to absorb it, we will deploy a three-year stimulus package to jumpstart our recovery, worth roughly 3 to 4 per cent of GDP.

Our stimulus will be designed, first and foremost, to provide the fiscal support the Canadian economy needs to operate at its full capacity and to stop COVID-19 from doing long-term damage to our economic potential. Key to this stimulus plan will be smart, time-limited investments that can act fast and make a long-run contribution to our future shared prosperity, quality of life, competitiveness and our green transformation.

The government’s growth plan will include investments that deliver on our commitment to create a million jobs and restore employment to pre-pandemic levels as well as unleash some of the Canadian economy’s pre-loaded stimulus: additional savings that have accumulated in Canadians’ bank accounts and on businesses’ balance sheets.

Many stimulus investments will need to wait until we have a vaccine and the threat of further outbreaks and shutdowns has subsided. However, some measures can be safely implemented now. They are a down payment on the investments to come and will help to minimize the scarring and accelerate the broader recovery in the future.

We will spend the winter working with Canadians, leading into Budget 2021, to plan and prepare our investments for when the virus is under control. At that time, we will be ready to shift into high gear. That is why we are announcing the scope of the plan now.

These measures will help us grow out of the COVID-19 recession, towards an economy that is greener, more innovative, more inclusive and more resilient. This strong support can turn a partial and uneven recovery into a broad-based and inclusive one that delivers a better future for all Canadians.

Our growth plan must continue to advance our progress on climate and create jobs in the clean economy. That’s why we are announcing our commitment to plant 2 billion trees over the next 10 years.

Canada’s future competitiveness depends on our ability to take advantage of the net zero emissions future and ensure there is a way for all Canadians to participate. Our plan includes grants to help up to 700,000 homeowners make energy-efficient upgrades to their homes as well as investments in building zero-emission vehicle charging stations where people live, work, and travel. These are steps we can begin safely taking now, to encourage consumer spending and investment while greening our economy. And our government will build on this down payment in short order, with a plan to take the next steps for a healthy environment and a healthy economy.

COVID-19 Has Hit Some Harder than Others

This is a recession like no other. Women, young people, Indigenous people, and Black and racialized Canadians are among those disproportionately affected, accounting for much of the workforce in some of the hardest-hit industries, including tourism, hospitality and retail.

The types of jobs most affected, and the sectors where we are seeing the hardest-hit workers, are different than in previous recessions. Our stimulus will be designed with this specific damage in mind and will seek to heal it. It will include measures to enhance our social infrastructure.

COVID-19 has caused a She-cession, rolling back many of the hard-won gains women have worked for over past decades. That is why we are starting today to lay the foundation of a Canada-wide early learning and child care system. Canada cannot be competitive until all Canadian women have access to the affordable child care we need to support our participation in the workforce.

December 7, 2020, will mark the 50^th Anniversary of the Royal Commission on the Status of Women in Canada, a landmark report that called on the federal government to immediately begin working with the provinces and territories to establish a national daycare system. Women like me, who were toddlers when this report was published, are now parents and grandparents. We have waited generations for our government to answer the call.

On the eve of this anniversary, the federal government is committed to historic investments that will make this promise a reality. Budget 2021 will outline a plan to provide affordable, accessible and high-quality child care from ocean, to ocean to ocean.

This is a feminist plan, to be sure. It also makes sound business sense and is supported by many of Canada’s corporate leaders, who have witnessed the economic toll this crisis has taken on women, families and children – and therefore on Canada’s bottom line.

For Indigenous peoples, this pandemic poses unique risks. While Indigenous communities were successful in controlling cases of COVID-19 during the spring and summer, the second wave has seen communities now facing outbreaks. Our government has been working with First Nation, Inuit and Métis Nation partners to keep people safe and ensure communities are prepared. We will continue to provide support and funding to communities through this second wave and beyond.

As we build back, we have the choice to build back better and tackle the challenges that constrain far too many Canadians: Chronic homelessness. Systemic racism. Gender-based violence. Discrimination against LGBTQ2 communities. Barriers faced by people living with disabilities. The unfinished and essential work of reconciliation.

Economic downturns are always particularly hard on young people. The COVID-19 recession is no exception. Among other measures, the government proposes to ease the burden of student debt by eliminating interest on repayment of the federal portion of Canada Student Loans and Canada Apprentice Loans for 2021-22.

We have also seen how COVID-19 has exacerbated existing housing and homelessness challenges. In addition to other measures, the government will provide a significant new investment through the Rapid Housing Initiative to help thousands of people in immediate need. In the coming months, we will be working with Canadians and consulting broadly, to design the stimulus measures that will guide our recovery and set our course as a country for the years ahead.

A Prudent Fiscal Plan

Canada entered this crisis in a strong fiscal position, allowing the government to take decisive action to put in place the support necessary for people and businesses to weather the storm. Canadians understand that the crisis demands targeted, time-limited support to keep people and businesses afloat and to build our way out of the COVID-19 recession.

The supports and investments outlined in this plan will stimulate a robust and inclusive recovery of the Canadian economy. Fiscal guardrails will help establish when the stimulus will be wound down. When the economy has recovered, the time-limited stimulus will be withdrawn and Canada will resume a prudent and responsible fiscal path, based on a long-term fiscal anchor we will outline when the economy is more stable.

Uncertainties about the timing of the pandemic and global economic developments mean that the timeline for the recovery should not be locked into a rigid pre-determined calendar. Instead, the government will track progress against several related indicators, recognizing that no one data point is a perfect representation of the health of the economy. These indicators include the employment rate, total hours worked and the level of unemployment in the economy.

An approach guided by economic data will help ensure the recovery is appropriately tailored to the needs of Canadians and the circumstances at hand. These data-driven triggers will let us know when the job of building back from the COVID-19 recession is accomplished, and we can bring one-off stimulus spending to an end.

But make no mistake: We commit to providing fiscal support until the economy is firmly back on track.  As we have learned from past recessions, there is danger in providing too little support to our economy, and also in withdrawing support too soon.

We have sought to be transparent with Canadians, in this Fall Economic Statement, about the existing uncertainty and the options under consideration in the days ahead. Whether we have a deep and prolonged second – or even third – wave, depends on our collective action and our collective commitment to stop the spread of the virus.

In this document, we offer different scenarios. This is a choice we have made to ensure that Canadians know we are planning for all eventualities. The rate of infection, the severity of localized shutdowns, the timing of the rollout of a safe and effective vaccine – all of these variables will shape our economic outlook and path to recovery in uncertain ways.

But as our fiscal plan shows, there are brighter days ahead. And we can afford to do this. Canada entered this pandemic with the strongest fiscal position of any G7 country. We retain that position today. Federal debt-servicing costs, relative to the size of our economy, are at a 100-year low. Canada benefitted from among the most significant declines in borrowing costs since the beginning of the year.

Everyone must contribute their fair share, so that the government has the resources to invest in people and keep our economy strong. That is why we are proposing to move ahead with implementing changes to ensure that the Goods and Services Tax/Harmonized Sales Tax (GST/HST) applies in a fair and effective manner to all e-commerce transactions, including those facilitated by multinational digital giants, and to limit stock option deductions in the largest companies. While we strongly favour a multilateral approach, Canada proposes to act unilaterally, if necessary, to apply a tax on corporations that provide digital services.

Does this plan mean the worst of the COVID-19 crisis is past? Regrettably, no. Indeed, Canada’s most severe case counts may come in the weeks and months immediately ahead. Hospitalizations across Canada are surging and the virus continues to take an unacceptable toll, particularly on our elders.

That is why we must all redouble our public health efforts, follow public health instructions, practise physical distancing, wear masks in public, avoid social gatherings, download the COVID Alert app and wash our hands. Canadians can and should use the programs the federal government has put in place that allow everyone to make the right public health decisions.

If we do the right thing to protect each other – if we hunker down and heed public health advice for these last remaining months, before a safe, effective vaccine is widely available – together, we will save lives. Our actions will bring closer the day when every Canadian can get back to normal life. And we will help strengthen our economic recovery.

After almost ten months of the pandemic, Canadians are tired. But we are not defeated. We know a better day is coming. And to get there, we know that we must help each other through the winter ahead.

We can do this. Canadians have faced adversity, and tough winters, before. We have always emerged stronger. We will this time, too.

The Honourable Chrystia Freeland, P.C., M.P.
Deputy Prime Minister and Minister of Finance

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