Amid a resurgence in COVID-19 cases, the federal cabinet is setting a new agenda that will focus on avoiding another economy-wide lockdown and bracing for a potential second wave.
Prime Minister Justin Trudeau met with his cabinet behind closed doors Monday for a two-day planning session. They began meeting almost a month after Mr. Trudeau announced Parliament’s prorogation and scheduled a new Speech from the Throne on Sept. 23. At the time, the Prime Minister said the pandemic presented an “unprecedented opportunity” to rebuild, and his government would lay out a plan to make the economy more green, inclusive and fair.
On Monday though, Mr. Trudeau signalled a shift in emphasis back to the immediate needs presented by the novel coronavirus that causes COVID-19.
“Our focus right now is on the COVID crisis. We need to get through this in order to be able to talk about next steps,” Mr. Trudeau said. “We are not out of the woods. We need to continue to remain vigilant. … The last thing anyone wants is to go into this fall in lockdown similar to this spring."
A government source said the cabinet meetings will focus on the immediate health and economic challenges, but will also address the inequalities that the pandemic laid bare – for example, the disproportionate effect on women in the work force, systemic racism and poverty. The Globe and Mail is not releasing their name because they were not authorized to speak publicly.
Mr. Trudeau said his cabinet would talk about support for vulnerable groups ”but our focus is very much on what we need to do to control COVID-19."
In August, case counts hovered between 200 and 400 a day nationally. Since then they have risen steadily, a “worrisome” trend, according to House Leader Pablo Rodriguez. On Monday the seven-day rolling average of new daily cases was 681, according to the Public Health Agency of Canada. Over the weekend, the Public Health Agency of Canada said cases were up more than 20 per cent from the previous week.
Environment Minister Jonathan Wilkinson, who’s portfolio has taken a back seat during the pandemic, said Monday the government is looking at building back the economy in a way that considers the effect of climate change but the government’s priority will continue to be “supporting Canadians through this pandemic.”
To that end, ministers were briefed by senior public-health officials and scientists, including Dr. Tam, the co-chairs of the government’s immunity and vaccine advisory groups, and chief science adviser Mona Nemer.
Mr. Trudeau said his cabinet would focus on ensuring the health care system doesn’t get overloaded and on preventing further spread of the disease. Another item on the table is Quebec and Ontario’s request to substantially increase baseline health care funding. The provinces have not yet specified how much more money they want, but Mr. Trudeau has already agreed to meet with the premiers to discuss federal transfers.
Increasing health transfers would add even more to a deficit that projections show is approaching $400-billion. The government has done away with its previous fiscal anchor of reducing Canada’s debt-to-GDP ratio and the Liberals have not said that spending will be limited by any other benchmarks. In light of that, Canada’s business community is urging the government to keep federal deficits at a manageable level.
Federal Finance Minister Chrystia Freeland spoke by phone with the chief executive officers of Canada’s banks last Thursday to discuss the economy. A senior banking official said the message to the minister included a call to keep fiscal sustainability in mind as further spending measures are planned. The Globe is not identifying the official because they were not authorized to speak publicly on the matter. The call was first reported by Bloomberg.
Former Bank of Canada governor David Dodge said current borrowed spending should focus on measures that improve productivity and encourage investment. In an opinion piece for The Globe, Mr. Dodge said Canada should aim for a growth rate that exceeds interest rates and for the federal deficit to decline to 1 per cent of GDP by 2023-24.
“A lot of people are asking whether we can manage our ballooning budget deficit. The answer is yes we can, if we act prudently,” Mr. Dodge writes.
Bringing home the reality of the pandemic, the Bloc Québécois announced Monday that its Leader, Yves-François Blanchet, and all other Bloc MPs are in preventative isolation while they await test results after a staff member in Mr. Blanchet’s office tested positive for the coronavirus.
“Rest assured that we take this situation very seriously,” Bloc spokesperson Carolane Landry said.
To avoid triggering an election, the minority Liberals' Throne Speech will need support from either the Bloc, the NDP or the Conservatives. But with just more than a week before it’s presented, the government has not yet discussed its agenda with any opposition party. Mr. Trudeau’s spokesperson Alex Wellstead said the government still plans to consult.
In a caucus meeting beginning Tuesday, the New Democrats will focus on improving the health care system, the future of the Canada Emergency Response Benefit, and an economic recovery plan that focuses on child care and the environment.
In August, the Liberals said they would transition Canadians, in need of income support, to a revamped Employment Insurance system or to three new benefit programs that will replace the CERB. The new programs need to be enacted through legislation, but the government has not yet negotiated support from any opposition parties.
Conservative Leader Erin O’Toole said Monday that his priorities are building the economy and ensuring Canada’s health care system is prepared to handle a potential second wave of COVID-19.
Speaking with reporters in Montreal after his first face-to-face meeting with Quebec Premier François Legault since Mr. O’Toole won his party’s leadership last month, the new Conservative Leader said he supports higher spending on health care.
“I would increase funding for health care, in a stable and predictable way, without conditions,” he said in French.
With a report from Kristy Kirkup
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