Finance Minister Says Spending Programs Needed To Prevent ‘Scorched Earth Economy’
HALIFAX – Canada’s Deputy Prime Minister and Finance Minister, Chrystia Freeland, said Canada’s growing debt has her concerned, but that the country needed to spend or be faced with a “scorched earth economy.” The comments came during a lunchtime Q and A with the Halifax Chamber of Commerce held through a Zoom conference.
Freeland recently gave a fall economic statement where she unveiled the Liberals’ plan to spend $100-billion in the next few years to stimulate the economy and support extended social programs. This extra spending is on top of a $381-billion deficit.
“I know this is something Canadians think carefully about, and I share that concern,” said Freeland when asked about the national debt.
“We can afford this; and what makes it so affordable is the remarkably low-interest rates that the federal government is taking advantage of.”
Freeland went on to say that the government has these low-interest rates “locked in.” They are the lowest rates the country has seen in 100 years, Freeland explained. She also warned that if Canada didn’t spend money to support those in need, the economy would look like “scorched earth.”
“If we hadn’t taken on the debt, we would be looking at a scorched earth economy,” said Freeland. “We would be looking at thousands of businesses going bankrupt… hundreds of thousands of people being unemployed…of families losing their homes.”
Freeland did not mention how, specifically, the debt will be paid off in the future.
During the Zoom call, Halifax Chamber President, Patrick Sullivan, asked Freeland about whether there would be more financial support for airports. Sullivan said the Halifax Regional Airport is important for the local economy and creates 5,000 jobs in the area.
Freeland said the government has earmarked $65-million for airport authorities, $260-million for regional airports, and $500-million for large airport infrastructure.
Sullivan also asked about whether there will be more supports for new businesses that have opened during the pandemic, noting that 85 new restaurants have been established in Nova Scotia. Much of the federal government’s programs are geared toward businesses that have been in operation for a while.
Freeland responded that this is an issue she has given a lot of thought about. She said the issue is “tricky” because opening up money for new businesses could lead to the programs being abused.
“It is something that I’m looking into. It’s a tricky one because it’s also important to have integrity in our systems,” said Freeland.
On the topic of financial supports, Freeland told the Chamber that the $40,000 CEBA interest-free loans are getting a $20,000 top-up, $10,000 of which will be forgivable.
As of December 4, the government’s webpage for CEBA loans mentions the $20,000 top-up, but not that $10,000 is forgivable.
During her talk with the Halifax Chamber, Freeland mentioned Canada’s need to create a national childcare program with the provinces. Freeland noted that Monday, December 7, will mark 50 years since the Royal Commission on the Status of Women first recommended further access to daycare services. The Finance Minister believes the Covid-19 pandemic, with parents working from home, showed how important affordable childcare is for the economy.
“I think what the coronavirus did, when schools and daycares were closed, is it made clear to a lot of people running companies that childcare wasn’t only a feminist issue… it was an economic issue,” said Freeland.
The Deputy Prime Minister also took the time to applaud the Nova Scotia business community for taking a leading role in public health. She said Nova Scotia has been a good example for the rest of the country to follow.
“What I find inspiring is that your businesses actually asked for them,” she said. “I think that shows real intelligence. It shows that people are smart. It shows that people understand that the best economic policy…is a strong health response.”