Deputy Prime Minister and Minister of Finance Chrystia Freeland delivers her first major speech from today’s budget, describing the $ 8.9 billion in financial support her government has introduced to help Canadians cope with the crisis. ‘rising inflation.
“We know that Canadians are worried about inflation and are wondering what their government will do about it,” Freeland said in a statement to the media.
“That’s why we have a new Affordability Plan: $ 8.9 billion in new support this year, which will put more money in the pockets of Canadians at a time when they need it most.”
TARGET | MPs respond to Freeland’s $ 8.9 million package to address affordability issues
MPs respond to Freeland’s $ 8.9 million package to address affordability issues
Parliamentary Secretary Rachel Bendayan, Conservative finance critic Dan Albas and NPD social development critic Leah Gazan discuss ways to address the cost-of-living crisis facing many Canadians.
Freeland said his plan to address inflation and the accessibility crisis has five parts: respecting the role of the Bank of Canada, investing in workers, managing debt, creating good jobs, and funding the set of programs that make up the Affordability Plan.
Freeland’s 40-minute speech at the Toronto Empire Club also focused on strategies to increase competitiveness and productivity and pledged to increase financial support if the economic situation worsens.
Conservative leadership candidate Pierre Poilievre has accused the Bank of Canada and its current governor, Tiff Macklem, of worsening inflation through its pandemic-era quantitative easing policy.
He has also vowed to fire Macklem if he becomes prime minister, a promise that has drawn criticism from some who say the Conservative MP is unfairly politicizing an institution that has always functioned at a distance from partisan politics.
See | Freeland details $ 8.9 billion in financial support for Canadians:
Freeland details $ 8.9 billion in financial support for Canadians
Deputy Prime Minister Chrystia Freeland discusses what she calls the government’s “Affordability Plan.”
Calling the Bank’s criticism “economically illiterate”, Freeland said the Bank’s job is to deal with inflation and reaffirmed that mandate late last year.
“The Bank has started work to get inflation back within the target, and it has the tools and experience it needs to keep inflation from settling,” he said.
Freeland said the bank’s reputation was one of the key reasons why Canada’s AAA credit rating was reaffirmed and that the institution promotes economic stability.
“At this time of global economic and political volatility, undermining Canada’s key institutions, especially the Bank of Canada, is very irresponsible, not to mention economic illiteracy,” he said.
The “Affordability Plan”
The measures already announced by the federal government in the 2022 budget and cited by Freeland in today’s speech include:
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Canada’s workers’ benefits increase by $ 1.7 billion this year. Individual workers can now receive up to $ 1,395 a year in benefits, while a family can benefit from up to $ 2,403 a year. These amounts would increase by $ 1,200 for individuals and $ 2,400 for families.
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Increased Old Age Security (OAS) by 10 percent, providing up to $ 766 in new support in the first year beginning in July for those over 75.
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Provide a one-time payment of $ 500 for affordable housing for low-income Canadians.
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Reduce the cost of childcare by an average of 50% by the end of the year and bring it to an average cost of $ 10 a day by 2025-26.
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Provide free dental coverage to Canadians earning less than $ 90,000 a year, starting with children under the age of 12, in 2022.
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Increased inflation-linked benefits, such as the OAS, the Guaranteed Income Supplement (GIS), the Canada Pension Plan, the Canada Child Benefit, and the GST credit.
The federal government says GIS is already 4.9 percent higher than a year ago due to inflation, and other indexed profits will also increase.
TARGET | “We are on a difficult path”: John Manley on inflation, the risk of recession
“We are on a difficult path”: John Manley on inflation, the risk of recession
“We could be in a recession,” said former finance minister John Manley. “Everything is a little negative right now.”
In his speech, Freeland compared Canada’s economic recovery with that of other G7 nations. He said Canada has recovered 117 per cent of the jobs lost during the pandemic, better than the 96 per cent recovery rate in the US, and now has an unemployment rate of just 5.1 per cent.
“This is the G7’s strongest recovery. It’s the G7’s strongest job recovery and Canada’s real GDP is 1.8 per cent above where it was in those horrible first weeks. [of the pandemic]”she said.
Freeland said that despite these positive figures, he knows that some Canadians are suffering from inflation, which blamed the pandemic, disruptions to global supply chains and Russia’s invasion of Ukraine.
Invest in workers, housing
While the Bank of Canada’s job is to fight inflation, Freeland said the government can help address other issues such as labor shortages, especially skilled workers.
“We do this by investing in immigration, skills, childcare and housing,” he said in French.
Freeland said Canada has maintained its policies to encourage immigration throughout the pandemic, and newcomers to Canada will be welcomed by employers who want to train staff.
“In the budget, we also set out to invest in the workers who are already here,” he said. “This means ensuring that our skilled workers can afford to travel to parts of Canada where their services are desperate.”
These workers, Freeland said, need housing, and his government’s promise to double the number of homes built over the next decade will help ensure people can find affordable places to live.
Debt management
Freeland said that while Canada has the lowest debt-to-GDP ratio in the G7, it wants debt to decline and said “Canada’s pandemic debt must be paid and will be paid.”
“In presenting the budget in April, I reaffirmed it as our fiscal anchor and committed myself to a review and a reduction in government spending, because that is the one responsible,” he said. “I’m sure our plan is the right one.”
Freeland added that he “does not underestimate the economic difficulties and uncertainty of the coming months.”
“We’ve had two years of remarkable turbulence. Our challenge now is to land the plane, and a smooth landing is not guaranteed.”
Opposition criticizes repeated ads
The NDP and the Conservatives have been pushing the Liberal government for weeks on the issue of inflation. NPD leader Jagmeet Singh issued a statement after the speech saying that the measures Freeland discussed are coming too late and will not help Canadians who need it now.
“People need real help. They need their government to put money back in their pockets so that they can pay for basic necessities,” Singh said in a statement. “Instead, the Deputy Prime Minister is on Bay Street today making re-announcements that don’t help the people of today.
Conservative MPs Dan Albas and Gérard Deltell issued a statement after the speech saying Freeland’s efforts to make life more affordable would only make matters worse.
“Canadians are undergoing a cost-of-living crisis due to the Liberal Trudeau’s misguided approach to taxation and spending,” the statement said.
“This poor economic approach consumes the profits of working Canadians and ignores the most basic principle of the economy: that spending during an inflationary crisis will only further fuel inflation,” the statement said. “However, the Liberals continue on this path with reckless abandonment, inflicting more inflationary pain on Canadians.”