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The federal government will provide $19-billion to the provinces and territories to assist with the economic recovery phase of the pandemic, Prime Minister Justin Trudeau says.

Mr. Trudeau said on Thursday that the agreement was reached after talks with the provinces and territories.

Previously, the Prime Minister had offered $14-billion, but premiers said they needed more, and were unhappy with conditions Ottawa wanted to place on the money.

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The new agreement contains several priority areas for the spending, including investing in enhanced capacity for testing; contact tracing; data management and information sharing; health care, including mental health; and substance use or homelessness. Other priorities are support for vulnerable people such as seniors in long-term care homes, funding for personal protective equipment and ensuring safe child care spaces are available. The federal dollars are also intended to support municipalities in their responses to the pandemic, and specific funding for public transit.

Ford says he won’t accept a ‘bad deal’ with Ottawa for financial aid, introduces omnibus COVID-19 recovery bill

The deal also provides funds for a temporary income support program of up to 10 days, related to COVID-19, for workers that do not have a paid sick leave plan.

Mr. Trudeau said Thursday there is no flexibility to transfer money from one sector to another, and that through negotiations, provinces agreed to invest in these areas.

“When we talk about the recovery phase, it’s not just about making sure we can detect, control and prevent future outbreaks, it’s also about helping people, businesses and entire communities adjust to our new normal, because until we find a vaccine, the daily threat of COVID-19 will not disappear,” Mr. Trudeau said at a news conference in Ottawa.

Deputy Prime Minister Chrystia Freeland, who was involved in negotiating the deal, joined Mr. Trudeau at the announcement. She said the funding will support the demands on provincial and territorial health care systems, including mental health, substance abuse and homelessness.

“This agreement will help our country buy enough [personal protective equipment] for health care workers and other essential workers and, critically, be ready in the event of a second wave,” she said.

When the $14-billion was first offered, Ontario Premier Doug Ford had said Ontario alone needed $23-billion and rejected Ottawa’s desire for a paid sick-leave plan, demanding more flexibility. He said on Thursday that Ontario would receive $7-billion in the new agreement, and didn’t directly answer when asked about his previous criticisms.

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Instead, Mr. Ford praised Ms. Freeland and Saskatchewan Premier Scott Moe, who chairs the council of the federation, for their work in securing the deal.

“At the end of the day, the Prime Minister had the final say in this, and he pulled through ... . He came up, he stepped up, true leadership. When you know when you’re negotiating within the family, I call it within the family, things get a little bumpy,” Mr. Ford said.

“But if it wasn’t for the leadership of Scott Moe, Chrystia Freeland and the great job of giving us the green light with the Prime Minister, this wouldn’t happen. Again, I played the smallest part in it. It’s everyone else [who] deserves the credit. So, I’m so happy we were able to get a deal,” he said.

In Toronto, which expects a $1.35-billion budget shortfall this year, driven in large part by steep losses at its transit system, the country’s biggest, Mayor John Tory called the deal “very good news.”

He said he was looking forward to more details on exactly how much money the city and its transit system would receive. Mr. Tory praised Mr. Ford and Ms. Freeland for reaching the deal, and lauded his fellow local mayors for keeping up the pressure.

Mr. Moe said in a statement he is “incredibly proud” of the work of the premiers on the agreement. Saskatchewan will receive $500-million, and plans to use it to increase testing and tracing capacity.

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B.C. Premier John Horgan said he was proud of B.C. for pushing the rest of the country to embrace a nationally funded and co-ordinated paid sick leave program.

The Premier told a news conference in Victoria that Mr. Trudeau and Ms. Freeland were “early adherents” to the idea, adding Yukon Premier Sandy Silver and Manitoba Premier Brian Pallister were also supportive. He said B.C.‘s share of the federal funding is about $2.1-billion.

The Alberta government is also pleased an agreement has been reached, said Christine Myatt, a spokesperson for Premier Jason Kenney.

“The provinces remained united throughout the negotiations and the result is better than what was initially offered, both in terms of the overall amount and flexibility on the use of funds where provinces need it,” Ms. Myatt said in a statement.

Mr. Trudeau said there are some areas, such as supporting vulnerable people, where Ottawa expects provinces to declare publicly how that funding is spent.

With reports from James Keller, Ian Bailey, Oliver Moore and Laura Stone

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