Canada’s federal government has put childcare and Covid-19 relief at the heart of the country’s first pandemic budget, as the governing Liberals announced massive spending plans in an attempt to address growing inequality – and avert a snap election.
Delivering her government’s first budget in more than two years, the finance minister, Chrystia Freeland, on Monday framed the ambitious spending programme as both necessary to combat the disastrous “economic wounds” of the coronavirus pandemic and an opportunity to build a more equitable society.
“We’re all tired, frustrated and even afraid. But we’ll get through this,” said Freeland. “This budget is about finishing the fight against Covid.”
The pandemic forced the government to spend heavily to avoid an economic crisis, and the Liberals have come under increasing pressure to release a financial roadmap for the country’s future.
Over the past year, Canada ran a deficit of C$354.2bn (US$283bn). In the next year, the Liberals plan to reduce that figure to C$154.7bn and C$30.7bn by 2025.
Ahead of the budget announcement, both Freeland and the prime minister, Justin Trudeau, had drawn attention to exodus of women and low-wage workers from the workforce during the pandemic.
Freeland pledged C$30bn over the next five years to create a national childcare program – something the Liberals have repeatedly promised, in various forms, over the last 30 years.
“The truth is that the tragedy of Covid-19 has created a window of opportunity, which we can open to finally build a system of early learning and childcare across our country,” Freeland said.
Canada has some of the most expensive childcare in the world— reaching as high as C$1,900 a month in Toronto. Within five years, Freeland says Canadians would pay an average of C$10 a day.
Freeland’s comments echo arguments by the US president, Joe Biden, earlier this month that childcare should be included as part of his government’s infrastructure spending.
Canada’s government also promised to spend C$100bn on stimulus projects – including affordable housing and green technology development – as well as billions on Indigenous communities and seniors.
To help offset the costs, new taxes were outlined on yachts, luxury cars and private aircraft, e-commerce warehouses and online platforms, as well as foreign-owned homes that sit vacant. But the government stopped short of imposing a wealth tax, which opposition New Democrats have called for.
Because the governing Liberals do not have a parliamentary majority, they will require another party to support the budget. If there is no willing partner, the government will fall and Canadians will be sent to the polls for a spring election. A vote on the budget is expected in the coming days.