Fighting pandemic is government's top economic priority, above deficit concerns: finance minister
'Let me assure Canadians that we understand the value of wise and prudent fiscal management and that is a policy our government will continue'
OTTAWA – Canada’s finance minister says fighting the pandemic is her top fiscal priority, above any concerns about the massive deficits the government is running.
Chrystia Freeland said limiting the spread of the virus is essential to Canada’s success and it will be the government’s top priority
“The single most important economic policy of our government and the best thing we can do for our economy is to keep coronavirus under control,” she said. “If we continue to do the right things on the health front that is the strongest foundation and support we can give to our economy.”
Even before any new spending measures in next week’s throne speech, Canada is facing a $343 billion deficit composed mostly of COVID-19 spending, including programs like the emergency response benefit and wage subsidy.
Prior to the pandemic, the Liberals had aimed to constrain deficit spending to less than 30 per cent of GDP, as a fiscal anchor. That target was overshot due to COVID spending and the Liberals have not yet said what their new anchor would be.
Freeland did not set a specific target on Tuesday, but said the government fully understands the value of a strong balance sheet and is aware of the concerns some people have raised.
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“Let me assure Canadians that we understand the value of wise and prudent fiscal management and that is a policy our government will continue.”
She said the spending the government did during the pandemic was necessary so Canadians could stay home in the spring and prevent the virus from spreading.
Freeland said she had been speaking often with former prime minister and finance minister Paul Martin who wrestled Canada’s deficit under control in the 1990s, as well as consulting with business leaders across the country.
Martin made significant cuts in government spending and returned the budget to balance before paying down a considerable amount of Canada’s debt.
She said having a good financial position is important to the government and she recognizes it is why Canada was able to spend so much to fight the virus.
“That strong fiscal situation Canada had entering this crisis is what gave us the firepower to fight the coronavirus.”
Millions of Canadians have lost their jobs during the pandemic as companies shut down and stores closed. Freeland said the government’s second priority — right after keeping the virus at bay — is ensuring those people are able to get back to work.
“We need growth and we need jobs,” she said. “We know those Canadians want to work and our government is absolutely committed to working hard to get the economic growth that is required for all Canadians to have jobs.”