| News

July 8, 2020 – Federal and provincial government update on the COVID-19 pandemic

Here is an update on recent decisions and actions by the Canadian and Québec governments in connection with the COVID-19 pandemic.

Government debt rather than personal debt

After two days with his virtual Cabinet, Prime Minister Justin Trudeau explained that in the face of the health and economic crisis caused by COVID-19, the government has decided to go into debt to spare Canadians having to do so.

The prime minister reassured Canadians that Canada entered into the pandemic crisis in a better financial situation than any other country in the world, with one of the lowest public debt to gross domestic product (GDP) ratios in the world. “We had a margin of manoeuvre,” he said.

According to Mr. Trudeau, Canada has one of the most ambitious economic recovery plans of any country in the world.

No increase in taxes

The prime minister said it would be a mistake to raise taxes and cut public services during these difficult times. He said that, to the contrary, it is time to invest in infrastructure to help relaunch the economy.

Mr. Trudeau added that in Canada, the federal government enjoys better interest rates than the provinces and that it will be easier for it to repay the debt in the coming years.

“The cost of not doing anything would have been much higher, both in terms of health and the economy. This is not the time for austerity measures,” said Mr. Trudeau.

Record deficit of $343.2 billion

Federal Finance Minister Bill Morneau announced a record-breaking deficit of $343.2 billion due to the COVID-19 crisis.

This is the greatest deficit in Canada’s history, generated by the measures put in place to fight the COVID-19 crisis, which required more than $230 billion in direct support and $85 billion in indirect assistance.

This financial support represents close to 14% of Canada’s GDP.

According to ministerial projections, the ratio of federal debt to GDP will jump to 49.1% in 2020-2021, compared with 31% the previous year. The country’s debt will reach $1,200 billion, compared with $765 billion one year ago.

Pandemic under control in Canada

Citing Public Health experts, Mr. Trudeau said that the pandemic is under control in Canada. “The number of cases and hospitalizations continues to drop across the country. Canada was effective in facing the COVID-19 pandemic because Canadians followed Public Health guidelines,” said the prime minister.

However, he warned that Canadians must remain prudent. There are still hot spots in the country, in certain residential and care centres and in the agricultural sector.

Digital consultations on a mobile app

The Québec government is launching digital public consultations on the possible use of a mobile app to notify exposure to COVID-19. These consultations will be followed by a parliamentary commission in August to gather expert opinions.

The public consultation, accessible on the government consultation platform (consultation.quebec.ca), seeks to determine Quebecers’ interest in such an application. It will wrap up on August 2.

Paired with existing measures, this app could contribute to the collective fight against the pandemic. While ensuring the anonymity and privacy of each person, the app would make it possible to improve communication with users who have potentially been exposed to the virus.

The app would be free, anonymous, secure, and installed on a voluntary basis, with no geolocating or facial recognition features.