Canada’s COVID-19 recovery plan is emerging in fits and starts as the federal government simultaneously struggles to stave off another wave of cases, prop up a struggling pandemic economy, and close deals on a successful vaccine.  Monday’s fall economic statement is the latest incremental update. 

It runs 287 pages of graphs, grim economic projections, and enhancements to the Liberal government’s pandemic response. There are few surprises in the document which, in normal times, acts as a checkpoint for a federal government’s spending habits over the previous year before it hunkers down to design an annual budget in the spring. But the Liberals did not table a budget in March, as the COVID-19 pandemic began creeping into the country. 

While the social impact sector isn’t explicitly mentioned in the update, the document nonetheless serves as the latest hint of what is to come in the 2021 federal budget, and much of it will have a direct impact on the issues social impact organizations work on. It offers promises of incredible stimulus, the skeleton of a national childcare program, and improved support for businesses, non-profits and other organizations struggling to keep their doors open in the face of public health measures. 

As politicians in Ottawa go back and forth over the fall economic statement’s fine print, Future of Good breaks down what really matters for the social impact sector — and Canadians at large: 

A $70 to $100 billion economic stimulus package over three years

The cornerstone of the fall economic update is a promise to invest the equivalent of 3 to 4 percent of Canada’s Gross Domestic Product, around $100 billion, over the next three years to jump-start the economy during one of its worst slumps in recent memory. (By comparison, the update says, Canada’s stimulus package during the 2008 Great Recession was around 2.5 percent of GDP). “The stimulus will help us build out of this recession towards an economy that is greener, more innovative, more inclusive and more competitive. In the coming months, leading into Budget 2021, we will be working with Canadians to further define the stimulus plan,” the statement says. 

Most of this stimulus won’t be spent by the government until a vaccine has been deployed. And it isn’t clear what exactly this stimulus will fund yet, but Deputy Prime Minister Chrystia Freeland suggested in her address to the House of Commons that they could include investments in zero-emission electric vehicle charging stations and providing green retrofit grants for up to 700,000 homeowners. “These are steps we can begin safely taking now, to encourage consumer spending and investment while greening our economy,” she said. 

Raising taxes on ‘multinational web companies’

Taxing Netflix and other (mostly American) web-based media companies is a Liberal government promise from well before the COVID-19 pandemic. The fiscal update sets out a tax policy in stone, although it is aimed at customers. Foreign companies that sell digital goods and services in Canada are not required to charge Goods and Services Tax or Harmonized Sales Tax (GST/HST), a loophole the fiscal update describes as problematic. “This gives foreign-based digital corporations an unfair advantage, and undercuts the competitiveness of Canadian companies,” reads the fiscal update. “It also deprives the government of tax revenues that could be used to better the lives of everyone.”

A new set of rules requires these companies — video streaming platforms like Netflix, music streaming apps like Spotify, or gaming platforms like Steam — to collect GST/HST. Customers will also need to pay taxes for any online retailer purchases that move their goods through Canadian warehouses. So, too, will short-term accommodation platforms like Airbnb. The fiscal updates are expecting as much as $3.2 billion in tax revenue over the next five years from these changes. (It’s worth noting that two Canadian provinces, Quebec and Saskatchewan, already require foreign companies providing digital services to charge provincial taxes for their goods and services). 

A $1 billion dedicated long-term care support fund for provinces

After deploying Canadian Armed Forces personnel to long-term care facilities in Quebec, Ontario, and Saskatchewan, the federal government is once again investing huge sums of money into shoring up the vulnerabilities of Canada’s elder care system. The fiscal update is promising up to $1 billion to provinces and territories for a wide range of activities, including for topping up staff waves, improving infection control, and improving ventilation. 

However, this funding is dependent on a couple of factors; provincial and territorial leadership will need to provide a detailed spending plan “allocated on an equal per capita basis” and show that they’ve spent their allotted money accordingly. Ottawa is also adding another $6.4 million over two years as part of a coaching and seed funding program for senior residences and LTC facilities. 

The federal government is also offering asylum seekers who work in Canada’s healthcare system the chance to remain in the country permanently if they wish. “In recognition of these “Guardian Angels” – asylum claimants working in the health care sector during the COVID-19 pandemic – playing a critical role in keeping Canadians healthy, the government announced a temporary measure that will provide a pathway to permanent residency for them.” 

Adding rent and wage subsidy top-ups for businesses and non-profits

Programs like the Canada Emergency Business Account have formed the backbone of Ottawa’s support system for businesses and other organizations, including non-profits,  forced to shut down in the face of public health restrictions. According to the fall economic statement, they will soon be expanded as Canada struggles with COVID-19’s second wave. Originally, only about a quarter of the $40,000 CEBA loan was forgivable, meaning that the government could extend payment deadlines or even not require payment at all. Now, an additional $20,000 of a CEBA loan can also be forgivable under certain circumstances. “These enhancements demonstrate the government’s commitment to stand by small businesses to ensure they can continue to support families and communities across the country,” the statement said. 

Ottawa is also extending the Canada Emergency Rent Subsidy for another three months, allowing organizations to receive up to 65 percent of their rent costs until next March.  A new lockdown support program allows organizations that are forced to close as a result of a lockdown order — as is the case for all non-essential businesses in the Toronto area and nearby Peel Region — to receive an additional 25 percent top-up to this program. 

Laying the groundwork for a national childcare plan

In the fall Throne Speech, the Liberal government promised a national child care program as part of a feminist-oriented restart of the economy. Freeland pointed to not only equity, but economics when outlining a public day care model. Women, especially those with small children, have been among the hardest-hit by COVID-19 pandemic job losses, and are among the slowest to return to work. “Now is the time to make long-term, sustained investments so that every Canadian family has access to affordable and high-quality child care,” the fiscal updates read.

That said, it doesn’t offer much in the way of a concrete, long-term vision for this proposed national child care plan. The Liberal government will provide around $20 million over the next five years to start designing this plan alongside other orders of government, experts, and stakeholders. Another $4.3 million for the next five years will also go into funding a federal secretariat for learning and child care that will “build capacity within the government and engage stakeholders to provide child care policy analysis in support of a Canada-wide system.”

Ending all boil-water advisories in First Nations communities

For decades, Indigenous leaders have demanded the Canadian government improve water sanitation and put an end to boil-water advisories in remote communities. Prime Minister Justin Trudeau, upon taking power, promised his government would be up to the job. The government’s commitment has been pushed back again and again over the past five years — the latest self-imposed deadline was March 2021. 

Within the fiscal update, the Liberal government is committing $1.5 billion in the 2020-2021 fiscal year, with another $114 million each year thereafter to “lift all long-term drinking water advisories and stabilize funding for water and wastewater infrastructure, including operation and maintenance costs, in First Nations communities.” According to Indigenous Services Canada, 61 long-term drinking water advisories remain in effect across Canada. 

Meanwhile, the federal government is promising to boost investments in Indigenous communities to address the pandemic’s disproportionate effects. A further $380 million will go into the Indigenous Community Support Fund to prevent the spread of COVID-19, improve food security, and protect those most vulnerable to the virus. 

No public vaccine distribution plan (yet)

One of the most pressing policy questions in Ottawa right now surrounds Canada’s vaccine deployment plan. When will all Canadians receive effective COVID-19 vaccines? According to the fiscal update, the Liberal government has spent roughly a billion dollars procuring “the most diverse portfolio of any country. All Canadians can rest assured that a safe and effective vaccine will be available to them – for free – once it is ready.” Of the seven vaccine candidates under consideration, three are currently under review by health regulators.

Judging when any of these vaccines will be fit for distribution is incredibly tricky: none have been approved by Health Canada yet, and there’s no way to know for sure when that will happen. That didn’t stop Conservative Leader Erin O’Toole from insisting that this question is on every Canadian’s mind. “What is the plan for rolling out the vaccine?” he said in the House of Commons following the fiscal update. “When does it arrive? Who gets it first?” 

Details on distribution are sparse. Around $284 million have been spent so far on procuring vaccine equipment (like swabs, alcohol, and needles), according to the fiscal update, in preparation for the largest vaccine program in Canadian history. But it isn’t clear who will get the first doses. The National Advisory Committee on Vaccination released a set of guidelines in early November that outlined four key groups: Those at high risk of contracting and dying from COVID-19, essential workers, those most likely to transmit the virus to high-risk people, and those living in conditions that put them at increased risk of infection. How these groups will be identified and reached, and who among them should receive the vaccine first isn’t clear yet. 

So what will be in the federal budget?

That isn’t clear yet. There is no deadline for the Liberal government to propose a budget (in fact, the Liberals didn’t table a budget at all in 2020), but political commentators expect it will arrive sometime next spring. This year’s fall economic statement was unusually thick, with one CBC reporter describing it as more akin to a “mini-budget.” However, the budget itself will almost certainly be a massive document hundreds of pages thick with detailed breakdowns of the Liberal government’s spending program. 

Between now and whenever Minister Freeland rises to table the 2020 federal budget, the federal government will be reaching out to Canadians as part of consultation efforts. In pre-pandemic times, the finance committee itself would travel across the country, holding open hearings for anyone with suggestions for the budget to make their case. This probably won’t happen this year, and it isn’t clear how much consultation the government can take into consideration between the COVID-19 pandemic and the ongoing economic crash. 

Regardless of what happens, 2021 will see one of the most important budgets ever tabled in recent political memory. If it goes well, it will outline a blueprint for Canada to not only survive the pandemic, but begin to thrive in the months and years required to rebuild — and perhaps transform — our country’s economy and social safety net. 

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