Canada’s next finance minister faces a serious challenge as the country charts its way through the most difficult economic circumstances since the Great Depression.
Chrystia Freeland, who will be sworn in later today after Bill Morneau resigned Monday night, will have to manage a COVID-19 recovery that is still very much underway, with more than 40 per cent of the three million workers who lost jobs due to the COVID-19 pandemic still unemployed as of mid-July.
Fewer than one-third of the 4.7 million Canadians who were receiving the $2,000-per-month Canada Emergency Response Benefit at the beginning of August would qualify for Employment Insurance when the CERB ends on Sept. 26, making the transition to EI another hurdle.
Meanwhile the spectre of protectionism continues to loom large after U.S. President Donald Trump reimposed tariffs on Canadian aluminum earlier this month _ Democratic presidential nominee Joe Biden also harbours protectionist sentiments _ further complicating trade relationships.
Bank of Montreal chief economist Douglas Porter says the longer-term issue is whether the surge in spending linked to the coronavirus will morph into a more permanent trend, with attendant tax and debt implications.
Ottawa has been pumping money into the economy since March, resulting in a projected debt of $343 billion, an increase of more than 1,000 per cent from the previous year.
This report by The Canadian Press was first published Aug. 18, 2020