Highlights of the Fall Economic Statement

Highlights of the Fall Economic Statement – November 2020

Yesterday, Minister of Finance Chrystia Freeland tabled the long-awaited Fall Economic Statement 2020 in the House of Commons, as COVID cases are rapidly increasing across the country and deep economic uncertainty persists.

The statement provides a detailed overview of Canada’s fiscal position and presents new details on COVID-related relief measures. The federal government also reaffirms its Throne Speech’s commitment to continue supporting the economy and the hardest-hit businesses through this crisis while laying the groundwork for the post-pandemic stimulus and long-term Liberal priorities, such as pharmacare, national affordable child care and addressing climate change.

Fiscal Overview

The deficit is estimated to reach a historic high of $382 billion for the fiscal year 2020-2021 before decreasing gradually to $121 billion in 2021-2022 and $51 billion in 2022-2023. The total debt will balloon to over $1.1 trillion in 2021, representing over 50% of the national GDP.

Government revenues, including personal income tax and corporate income tax, are expected to decrease significantly while expenses are rapidly increasing as a result of COVID-related business shutdowns and lockdowns.

Key Highlights

As previously announced as part of its $10 billion Growth Plan, the Canada Infrastructure Bank (CIB) has earmarked $2.5 billion for clean power and is currently working in collaboration with provincial and regional partners to connect Canadians to clean electricity across Canada through regional projects. As a new measure to further support project predevelopment work, the government proposes to provide $25 million in 2021-22 to help some proponents complete engineering assessments, community engagement, and environmental and regulatory studies. This will help inform and complement the CIB’s efforts to identify and address financial gaps in the projects.

Creating a 100% government-backed credit availability loan program at low-interest rates for the hardest-hit businesses and sectors such as tourism, hospitality, airlines and accommodation. Details on the new program to be released in the coming weeks.

  1. As previously announced as part of its $10 billion Growth Plan, the Canada Infrastructure Bank (CIB) has earmarked $2.5 billion for clean power and is currently working in collaboration with provincial and regional partners to connect Canadians to clean electricity across Canada through regional projects. As a new measure to further support project predevelopment work, the government proposes to provide $25 million in 2021-22 to help some proponents complete engineering assessments, community engagement, and environmental and regulatory studies. This will help inform and complement the CIB’s efforts to identify and address financial gaps in the projects.
  2. Creating a 100% government-backed credit availability loan program at low-interest rates for the hardest-hit businesses and sectors such as tourism, hospitality, airlines and accommodation. Details on the new program to be released in the coming weeks.
  3. Increasing the maximum rate of the wage subsidy program to 75% from December 20, 2020, to March 13, 2021.
  4. Maintaining the current maximum rate of the rent subsidy program to March 13, 2021, to provide greater certainty to businesses.
  5. Providing a post-pandemic stimulus of up to $100 billion over three years once a vaccine is approved and distributed. The stimulus package will represent three to four per cent of Canada’s GDP over three years.
  6. Providing $500 million in additional funding to the Regional Development Agencies to provide financing support to local businesses unable to access other federal financial assistance.
  7. Providing $1 Billion over three years for safe long-term care fund for provinces and territories.
  8. Eliminating Interest on Canada Student Loans and Canada Apprentice Loans for 2021-2022.
  9. Temporarily boosting the Canada Child Benefit up to $1,200 in 2021 for each child under the age of six for families entitled to the Canada Child Benefit.
  10. Providing a $287 million top-up to the federal Zero-Emission Vehicles (ZEV) incentives program.
  11. Investing $150 billion over three years in ZEV charging infrastructure.