World

Fiscal 2021 update promises new COVID-19 spending

The federal government pledged an additional $8.1 billion in spending to help end the fight against COVID-19, while predicting a modest reduction in the national deficit.

Deputy Prime Minister and Finance Minister Chrystia Freeland provided a snapshot of the country’s financial situation on Tuesday while releasing the autumn economic and fiscal update.

New line items contribute to a broader spending outlook of $71.2 billion over the next seven years. That number starts with $28.4 billion in the 2021-22 financial year, with $4.5 billion going toward combating the Omicron variant and another $5 billion going toward flood recovery efforts. in BC.

Among the new pandemic proposals, the government proposes to allocate $2 billion over two years, starting from 2021 to 22, to the Public Health Agency of Canada (PHAC) to purchase drugs to treat COVID-19 .

The government is also proposing to provide $1.7 billion to Health Canada and the PHAC to help provinces and territories secure rapid tests and the supplies needed to administer them.

In response to calls from opposition politicians, $742.4 million will also go through one-time payments to low-income seniors across Canada who have seen the Supplement. Their Guaranteed Income supplement is withdrawn by accepting either the Canada Emergency Response Benefit or the Canada Recovery Benefit.

DETERMINATION ON DISCIPLINE

The document forecasts the deficit for 2021-22 will fall to $144.5 billion, down from the $154.7 billion estimated in the spring budget. In fiscal year 2022-23, the deficit is projected at $58.4 billion, down slightly from the previously forecast $59.7 billion.

The fiscal 2021-22 outlook includes two short-term cost pressures – the Omicron and BC floods – that could influence how the final deficit picture is formed.

For that reason, the government has come up with a faster recovery scenario and a slower recovery scenario. The first company predicted a $142 billion deficit and forecast a $147.9 billion deficit.

Kevin Page, a former congressional budget official and now president of the Institute for Fiscal Studies and Democracy, said that while the deficit remains “huge,” it “is falling like a rock.”

“The deficit will then continue to normalize over the medium term. So, can we ask the government to account for the year-on-year decrease in the deficit, I think will be an issue for the legislators,” he told CTV’s Power Play channel. News

REVENUE UP, DOWN

The reduced deficit was explained by an increase in federal revenue and a decrease in national spending projections.

The fiscal update noted that due to a more upbeat labor market outlook, personal income and corporate profits, income tax revenue “is expected to be about $12 billion higher than average.” per year during the forecast period”.

Total tax revenue, including excise and import tax revenues, will reach $312.1 billion at the end of fiscal year 2021-22, increasing to $391 billion in 2026-27.

Government spending will fall from $28.4 billion this financial year, which ends in March, to $3.8 billion in 2026-27.

A significant portion of that will go toward compensating First Nation children harmed by Ottawa’s full range of preventive child services. It will also help pay for lasting reform of the child welfare system.

The government announced on Monday that $40 billion would be reserved for cause, but a financial update showed it already accounted for $16 billion of total spending.

INFLATIONARY

On inflation, the document notes that economists expect price pressures to continue for some time, noting that these pressures are “global trends” and affected by disruptions. supply chain and transportation bottlenecks.

As a result, the Government’s outlook on the Consumer Price Index (CPI) has been revised up to 3.3% this year and 3.1% in 2022.

“CPI inflation is then expected to gradually normalize to around 2% over the remainder of the forecast horizon, in line with the average inflation rate in Canada over the past 30 years,” the document reads.

Freeland gave a speech to announce her financial update, after two of her employees tested positive for COVID-19. On Twitter, she said she had two negative molecular tests on Tuesday but out of an abundance of caution chose not to attend in person.

“This economic and fiscal update provides Canadians with a transparent report on our nation’s finances and targeted investments that will ensure we have the weapons we need to end this life. fight against COVID-19, an effort more urgent than ever with the rise of Omicron,” she said.

OPPORTUNITY RESPONSE

Conservative Party leader Erin O’Toole responded to the update in the House of Commons on Tuesday, citing high inflation for 18 years and suggesting the government is taking advantage of it.

“Inflation is boosting their tax revenue, if you raise the general price level by almost 5 per cent, that would boost GST revenue by 5 per cent,” he said.

“Canadians are paying the price. Inflation looks good to increase their budget, as it keeps Canadians from meeting their budget. “

Meanwhile, NDP Leader Jagmeet Singh said the document does not respond to the “severe” of what Canadians are going through, mainly referring to the struggles of finding a home.

“There is no real solution to the housing crisis… we will choose people over those who are profiting from the housing market by coming up with measures that can actually bring down the housing market,” he said. market heat.

The government introduced a series of measures to cool the housing market during the election campaign, including eliminating blind bidding, but these provisions were not included in the update.

“We know housing prices are a real concern, especially for middle-class people looking to buy their first home. Addressing housing affordability remains a priority for our government. Our work is continuing. We will take further action in the upcoming budget,” the document reads.

.

Source link

news7h

News7h: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button
Immediate Peak