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A fiscal plan of warlike dimensions against covid-19 stirs up criticism of the Trudeau government in Canada

2020-12-02T13:49:12.092Z

The Executive increases the deficit and goes into debt to support families and companies as a result of the pandemic



Justin Trudeau, Prime Minister of Canada, during a press conference in Ottawa on Tuesday.Sean Kilpatrick / AP

The Canadian government persists in its efforts to reduce the economic damages derived from the pandemic with injections of dollars that have not been received in the country since World War II.

The International Monetary Fund underlined in its October estimates that the Canadian deficit is the one that has increased the most this year among developed economies.

Chrystia Freeland, Minister of Finance, presented a report to Parliament on Monday on the financial situation as a result of COVID-19 and an economic recovery plan.

“It is important that Canadians know that the federal government will be there to help them through this crisis,” he said.

The opposition warns of indebtedness and calls the plan "electoralist".

At the end of September, the Office of the Parliamentary Director of the Budget announced that the deficit would reach 253.91 billion dollars (210.5 billion euros) this year.

This figure has been fed with salary subsidies, emergency benefits for the self-employed and students, support for commercial rental, investments in research and purchase of sanitary supplies, among other points.

However, Freeland commented in his speech to parliamentarians that the fiscal hole will be in 2020 of 381.600 million dollars, although the most pessimistic scenario may cause it to be around 398.700 million.

Chrystia Freeland, considered Prime Minister Justin Trudeau's most trusted political figure, has held the Finance portfolio since August.

He came to office after heading the Foreign Ministry, where he was in charge of renegotiations of the North American trade framework.

In the report, Freeland plans to continue with wage subsidies and commercial rental support, as well as giving a bonus to households with children under the age of six.

Likewise, aid for culture and tourism are planned, as well as incentives for green energy.

Regarding the plan to relaunch the economy, the minister indicated: "Once the virus is controlled and the economy is ready, we will launch a program of economic stimulation measures for three years."

Freeland pointed out that this will require between 54,000 and 77,000 million dollars, with the goal of creating at least one million jobs.

Ottawa estimates that the deficit will return to levels similar to those prior to the pandemic within five years.

In 2019, it represented more than $ 26.5 million.

Regarding how to finance this large-scale economic effort, Freeland commented that low interest rates allow the country to seek these resources.

The IMF had already alluded to the level of Canadian debt.

Before the pandemic, the North American country had one of the lowest rates among the members of the OECD or the G20 (25.9% of its GDP in 2019).

The minister pointed out that it may reach 50.7% (about 1.10 trillion Canadian dollars), but that the country can face this scenario.

Statistics Canada - the federal agency that collects official data - published this Tuesday that GDP had a record rise in the third quarter of this year: 8.9% over the previous period.

However, despite the fact that this growth is the most pronounced since 1961, the year in which quarterly data began to be compiled, real GDP fell by 5.3% compared to the fourth quarter of 2019. “This shows that investments that We have done have helped families and businesses stay afloat.

But times are still tough, ”Trudeau said.

The federal opposition parties expressed different views from those of the liberals.

Jagmeet Singh, leader of the New Democratic Party, said: "This government is unwilling to tax the excess profits of big business and billionaires, and the result is that ordinary citizens will end up paying the bill for recovery."

Erin O'Toole, leader of the Conservative Party, said that liberals are resorting to loans uncontrollably and accused the government of "burning money to hide their incompetence."

Yves-François Blanchet, leader of the Québec Bloc, commented that the plan lacks details, suggesting that the Liberals are preparing the conditions for a budget in 2021 intended as an electoral platform.

"Clearly, the prime minister is opening a window for a spring election," he declared.

The idea of ​​a program that has an upcoming election in the rearview mirror was echoed in different media spaces.

“Pandemic Recovery Plan or Campaign Platform?

With her tax update, Chrystia Freeland offers both, ”Heather Scoffield wrote in her economic column in

The Toronto Star

.

Justin Trudeau insisted on Tuesday that the economic recovery plan will mean a vote of confidence in Parliament. It should be remembered that the Liberals formed a minority government in 2019. “I trust that none of the opposition parties wants an election in these times. It is not our case. We want to give Canadians the support they need, ”he declared. At the end of November, a survey by the firm Abacus Data showed that Trudeau's party has 36% of the support - close to the area for a majority government - and the Conservatives have 30%.

Source: elparis

All business articles on 2020-12-02

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