Freeland Announces Update on Federal Finances for Nov. 30

Freeland Announces Update on Federal Finances for Nov. 30
Minister of Finance Chrystia Freeland answers a question during question period in the House of Commons on Parliament Hill in Ottawa on Oct. 29, 2020. (The Canadian Press/Sean Kilpatrick)
The Canadian Press

OTTAWA—Finance Minister Chrystia Freeland says the Liberals will deliver a long-awaited update on the health of federal finances on Nov. 30.

She made the announcement Monday in the House of Commons.

The Liberals had promised an update this fall on the federal deficit as part of a document that could also include the first steps toward a national child-care program.

The government has not tabled a budget for this fiscal year, but in July delivered what it called a “fiscal snapshot” that estimated the deficit was heading for a record of $343.2 billion.

But that figure doesn’t include added spending since July, nor many of the promises the government has made since.

Freeland said the government will continue to support Canadians through the pandemic and ensure the post-pandemic economy is “robust, inclusive, and sustainable.”

The Liberals have also said the update will provide the government’s outlook for the economy, and spending guidelines to avoid deficits from spiralling out of control.

Observers are looking for a plan for managing the near-term impacts of the pandemic, but also mitigating the longer-term effects it will have on the country.

Goldy Hyder, president of the Business Council of Canada, said he wanted to see a co-ordinated approach to the pandemic in the document, as well as help for the hardest-hit sectors of the economy, travel, tourism, and hospitality.

The announcement came as the federal government opened applications for a long-awaited new commercial rent-relief program to help businesses struggling to pay the bills because of the COVID-19 pandemic and related restrictions.

The new Canada Emergency Rent Subsidy replaces an earlier rent-support program for businesses introduced in the spring that saw little pickup because it relied on landlords to apply for help.

It will cover up to 65 percent of rent or commercial mortgage interest on a sliding scale based on revenue declines, with an extra 25 percent available to the hardest-hit firms.

At a midday news conference Monday, Freeland said the measure, among others, should prevent viable businesses that have survived this far into the pandemic from faltering now that an end is in sight—a nod to encouraging news recently about vaccine development.

Still, she said, companies and Canadians are heading into “what we all know will be a difficult winter,” calling the support crucial to making it to next spring.

The government is only setting the rules until Dec. 19, after which the Liberals are promising to adapt and target the aid as needed.

The Canadian Federation of Independent Business, which represents thousands of small companies across the country, welcomed the new rent program as long overdue.

But it noted the program doesn’t help companies that would have qualified for the previous rent-relief program if only their landlords had chosen to apply.

The assistance will cover rent, property taxes, insurance and mortgage interest for qualifying companies going back to Sept. 27.

Laura Jones, CFIB’s executive vice-president, said small businesses are still anxious about applying for the program and whether they will qualify or fill out forms properly. She said that won’t subside until the aid is in the bank.

Many businesses still don’t know about the new program or how it works, or believe they’re not eligible because revenue losses aren’t as steep as what the previous version required, Jones said Monday.

“Businesses are paying attention to so many things,” she said about the need to educate businesses. “It’s like drinking from a firehose all the time, on top of trying to keep your business afloat.”

The revamped program includes a requirement that entrepreneurs pay their rent before applying, putting the subsidy out of reach for many cash-strapped stores. The Liberals have promised to quickly introduce legislation to end that requirement.

In the meantime, the Canada Revenue Agency said it won’t require prepayment before paying out the aid. But the CRA said any rent expenses that haven’t been paid when a company applies will have to be paid within 60 days of receiving the subsidy.

“The government had all summer to come into September with draft legislation that is properly thought out to support small businesses and they blew it,” said Conservative MP Pat Kelly, his party’s small business critic.

The CRA said its online application and automated verification system should process claims on Nov. 30 and issue payments within three to five business days.

The CRA also promised little red tape for applicants for whom the agency doesn’t have information already on file to verify a claim. In those cases, applicants or third parties like landlords might be contacted for information on lease agreements and mortgage payments.

Statistics Canada reported last week that commercial rents rose by 0.7 percent in the third quarter of the year, after a record 1.8 percent plunge in the second quarter when the economy took a nose dive due to COVID-19.

Rents for office buildings rose at the fastest pace, followed by industrial and then retail buildings.

The national statistics agency said the rise in commercial rents in the third quarter “reflected the gradual ending of rent relief and abatement that began in the second quarter.”

By Jordan Press