Rethinking the path forward
Deputy Prime Minister and Minister of Finance Chrystia Freeland tabled the 2021 Federal Budget on April 19. This Budget is the first since the onset of the COVID-19 pandemic and the first since 2019.
The government faced a two-pronged challenge in this pandemic-time Budget: spur recovery with spending and rein in runaway debt levels created by that spending.
- 2020-21—$354.2 billion
- 2021-22—$154.7 billion
The deficit in 2019-2020 was $39.4 billion. The previous largest deficit in Canadian history was $55 billion in 2009, a result of the 2008 financial crisis. No timeline was included for balancing the budget.
- Federal debt—$1,079 billion (projected to be $1,233.8 billion in March 2022)
- Federal debt as a percentage of GDP—49% (projected to be 51.2% in March 2022)
Elevated national debt levels are mostly due to COVID-19 spending. The projected spend for the Canada Emergency Wage Subsidy (CEWS) for the 2020-21 and 2021-22 fiscal years combined is $110.6 billion. For the Canada Emergency Rent Subsidy (CERS) it is $8.4 billion.
See more on the economic outlook based on this year’s Budget.
Budget at a glance
As expected, the government prioritized spending to spur a sustainable recovery from the pandemic. The Budget extended COVID-19 support programs, introduced a new hiring incentive for employers called the Canada Recovery Hiring Program, updates the Canada Emergency Wage Subsidy (CEWS) and