Deputy Prime Minister Chrystia Freeland says some major emergency pandemic support programs may not need to be extended through November, as provinces loosen restrictions and the economy improves.
But Freeland, who is also finance minister, heaped caveats on that assessment, saying the COVID-19 pandemic economy and recovery have been notoriously unpredictable.
“One thing we have seen from the U.S., which started opening up a little bit ahead of us, is the course of the recovery has also had some bumps which people hadn’t predicted. So we’re just going to be watching closely, and we’re prepared to extend those supports further if necessary,” she told CBC chief political correspondent Rosemary Barton in an interview that aired Sunday on Rosemary Barton Live.
“For now, we’re looking pretty good, though.”
The Liberal government’s 2021 budget — Freeland’s first as finance minister, which is currently awaiting second reading in the Senate — provides a “base case” for changes to emergency measures, such as the Canada Recovery Benefit and federal wage subsidy, she said.
Currently, those key supports will be extended until Sept. 25.
“That’s a pretty long time from now,” Freeland said. Aside from the wage subsidy and CRB, the government’s new hiring incentive would continue to November, and a revamped, flexible EI system will continue for another year.
But she said the proposed gradual decline of income and business supports starting in July is “looking good to me.”
Freeland said economists are forecasting a strong economic recovery, but Ottawa is retaining the power to extend support measures until the end of November if needed.
“This has been such an unpredictable virus. And because of that, the economic response actually has been unpredictable and not accurately predicted by anyone.”
The Organization for Economic Co-operation and Development predicted in May that the Canadian economy would grow by just over 6.1 per cent in 2021, boosting a previous projection of 3.7 per cent made in March. The Conference Board of Canada predicted similar growth this year.
Amid inflation concerns from some experts and politicians, the Bank of Canada has held interest rates steady, arguing that rising prices are a temporary phenomenon.
‘Working hard’ on child-care program
Freeland was also asked about progress on the landmark social policy included in this year’s budget — a $30 billion commitment over the next five years to provide affordable child care across the country.
“I’m not going to pre-empt any announcements, but some provinces and territories have put their hand up, and we are working hard with them,” she told Barton.
“I don’t believe in counting my chickens before they are hatched. But there are some eggs over which we are brooding right now.”
Several provinces, such as Alberta and Ontario, have expressed skepticism about the plan, which would eventually see the federal government footing the bill for half of all child-care costs in a bid to reduce fees to an average of $10 a day.
But the child-care project, along with the rest of the Liberals’ policy agenda, depends on its return to government over the next few years, and an election is widely expected at some point this year.
Prime Minister Justin Trudeau has previously said an unproductive Parliament would be one factor to consider when thinking about a possible early election.
Freeland said Sunday she was focused on making policy change a reality. But she said the minority government has experienced difficulty in getting bills passed. She also appealed to senators to continue to work to pass legislation, including the budget implementation bill that is awaiting second reading in the Red Chamber.
“I do think this spring we’ve had a shift back a little bit to status quo ante. It has been much more of an uphill struggle even to get the budget passed.”