Freeland unveils 'affordability plan' based on pre-existing commitments

Deputy Prime Minister and Finance Minister Chrystia Freeland has presented a multi-pronged "affordability plan" outlining how the government intends to address inflation, based on pre-existing commitments.

The measures, totalling $8.9 billion in spending this year, include planned boosts to certain benefit programs, as well as the federal government's child and dental care plans. Freeland also cited "respect" for the Bank of Canada, fiscal restraint, and creating "good jobs," as measures that will help steer the economy through the current turbulence.

"I'm confident that our plan is the right one, but I do not underestimate the economic difficulties and frankly, the uncertainty of the months to come," Freeland told the crowd during a noon-hour keynote address at Bay Street's Empire Club in Toronto on Thursday.

Freeland spoke about the state of the Canadian economy and about the federal government's next steps as it relates to measures rolling out to eligible Canadians soon.

Specifically, in signalling that the Liberals do not plan to roll out new government spending to address the current cost-of-living crunch, Freeland cited a series of "real and tangible steps" that she promised would "get inflation under control."

The federal plan meant to improve affordability includes:

• The anticipated enhancement of the Canada Workers Benefit that will see the eligible estimated three million full-time, minimum-wage workers receiving up to $1,200 more through their tax return.
• The expected cutting of child care fees for Canadian families, estimated at an average of 50 per cent by the end of the year.
• The enacting of the longstanding commitment to increase the Old Age Security pension for seniors 75 years and older by 10 per cent, providing more than $766 to full pensioners in the first year.
• The issuing of a one-time housing affordability payment providing a $500 payment to nearly one million low-income Canadians this year.
• The commitment to enact a dental care program that in 2022 will provide coverage for Canadians who earn less than $90,000, starting with children under the age of 12.
• And, the increase expected to a host of other benefits, because they are indexed to inflation. This includes the Guaranteed Income Supplement, Canada Pension Plan, the Canada Child Benefit, and the GST Credit.

The federal government has been under growing pressure to help reassure Canadians who are facing rising costs of living, on everything from gas to groceries.

All of the initiatives cited by Freeland on Thursday, stem from the last two federal budgets. Still, the finance minister suggested that the spending is still "new money for the Canadians receiving it this year."

"Now, given the uncertainty in the global economy, would it be wise for me to stand here and rule out the need for further support in the future? Of course it would not be. But, many of the most vulnerable Canadians are already receiving more financial support today than they did last year. And they will continue to receive new support in the weeks and months to come," Freeland said.

In the speech—the first major remarks from Freeland on the topic since the 2022 federal budget was tabled in April—the deputy prime minister painted a picture of where Canada stands compared to other countries.

"If the data is so rosy, if the rebound is so strong… Why don't we feel very good? Why are Canadians so worried? I think everyone here knows the answer: inflation," Freeland said. "Jobs are plentiful, business is booming, but it is also harder for a lot of Canadians to pay their bills at the end of the month."

While referencing the state of this country's jobs recovery, GDP growth and the low unemployment rate, she also noted the need to be fiscally responsible and not further inflame inflation rates.

She also said cited the impacts of the COVID-19 pandemic and the ongoing Russian invasion in Ukraine as key pressure points contributing to the current economic situation.

"Inflation is not a made-in-Canada challenge and it's actually less severe here than among our peers," Freeland said.

Amid heightened attention on the role of the Bank of Canada's efforts to combat inflation, Freeland made reference in her remarks to the importance of the central bank's independence.

She also called out those who may be undermining the institution—something Conservative leadership candidate Pierre Poilievre has been accused of—as being "highly irresponsible, not to mention, economically illiterate."

The opposition parties were quick to pounce on the deputy prime minister's remarks, with NDP Leader Jagmeet Singh—the Liberals’ key ally in a supply and confidence deal—said the plan shows the government doesn’t understand the reality being faced by Canadians who are struggling.

"For a lot of Canadians, the only thing that speech will outline that's going to help them is a $7 increase. For some Canadians, that's all they're getting," Singh said, citing the projected increase to the GST rebate. "Looking through these flyers, there's not a lot you can buy in a grocery store for an extra $7," Singh said.

"This is a serious concern that there's not the urgency that's required."

Conservative finance critic Dan Albas questioned why Freeland chose instead of delivering her address in the House of Commons, to give Canadians "a lecture from their finance minister at $1,000-a-table lunch in Toronto."

"Rather than coming forward with a plan to fight inflation, one that would, for example, give Canadians a break at the pumps… One that would be able to help them pay for their mortgage as it goes up… Chrystia Freeland re-announced programs that are already indexed to inflation," Albas said.

"Rather than helping people in their everyday lives today, instead, they have to wait until the next inflation update."