Canada to spend big to 'punch way out of Covid recession'

OTTAWA: Canada's finance minister announced Can$101.4 billion (US$80.9 billion) in spending Monday to help its battered economy recover from the pandemic and set a greener course with a new climate target.

The measures in the government's first full fiscal plan in two years are to be rolled out over the coming years.

"This budget is about finishing the fight against Covid," Finance Minister Chrystia Freeland said in a speech to parliament. "It's about healing the economic wounds left by the Covid recession. And it's about creating more jobs and prosperity for Canadians in the days -- and decades -- to come."

"We must punch our way out of the Covid recession. That means ensuring lost jobs are recovered as swiftly as possible, and hard-hit businesses rebound quickly," she said.

Freeland said the government would extend wage and rent subsidies and other emergency aid through September to "conquer Covid," create a new national childcare program, and "embrace this moment of global transformation to a green, clean economy."

In the budget are also funds earmarked to support the tourism sector, indigenous peoples and Black entrepreneurs, as well as to build domestic vaccine production facilities and new affordable housing to end homelessness.

Students will get a break on interest on their loans, while buyers of high-end cars, yachts and private jets will have to pay a new luxury tax.

One of the single largest line items in the budget is Can$17.6 billion put aside to help companies cut their CO2 emissions, roll out carbon capture and storage technologies and switch to hydrogen fuel.

The budget also sets out an accelerated plan to cut Canada's greenhouse gas emissions, and unveils a new target for reducing emissions by 36 percent from 2005 levels by 2030 -- ahead of a virtual Earth Day summit on Thursday hosted by US President Joe Biden.

Although there has been chatter in Ottawa about possible snap elections, a small leftist party in the Commons vowed to prop up Prime Minister Justin Trudeau's minority Liberal government in order to pass the budget and avoid going to the polls while Covid-19 cases are surging and threatening to overwhelm hospitals.

"I want to avoid an election," said Jagmeet Singh, leader of the fourth-ranked New Democrats. "With the third (Covid) wave hitting hard," that would be "irresponsible," he said.

Trudeau, ahead in the polls, however, might still be tempted to pull the plug on his own government and call an early election in hopes of regaining a majority in parliament -- 18 months after the last ballot.