Deputy PM and Finance Minister Chrystia Freeland today released the government’s Economic and Fiscal Update 2021, which provides an overview of Canada’s finances and its upccoming spending priorities.
The update projects a $154.7 billion deficit for 2021-22, which is significantly lower than last year’s deficit of $354.2 billion that was incurred during the height of the pandemic.
The government plans to allocate $67.4 billion to a range of new funding initiatives, of which almost $30 billion will be set aside for additional pandemic spending over six years. Key funding commitments related to the pandemic include the following:
- $4.5 billion for measures related to the new Omicron variant, which can be used to extend lockdown support measures and expand border testing if necessary;
- $1.7 billion in new spending to purchase 180 million more rapid tests for provinces and territories, with a view to making such tests available to schools, workplaces and individuals free of charge;
- $7.3 billion to procure Covid-19 boosters this year, and in the years ahead if needed;
- $37.4 million over three years to implement and oversee vaccine mandates for air, rail and marine employees and passengers;
- $300 million to help provinces and territories develop and implement proof of vaccination programs.
Other major spending commitments include a one-time $5 billion transfer to help B.C. deal with the fallout from the recent floods, and the allocation of $50 million to strengthen supply chains through a new, targeted call for proposals under the National Trade Corridors Fund, which will focus on helping ports acquire additional storage capacity and alleviating congestion and bottlenecks at various touchpoints along the transportation network. It is worth noting that supply chain issues factor quite prominently in the update, and are identified as a major contributor to rising prices overall.