What to expect from the federal government's long-awaited fiscal update

The federal government's prescription for the COVID-19 pandemic spending is the best medicine hasn't varied much since the spring. The finance minister is signallingthat approach will continue (if in much smaller doses)in next week's economic statement.

"Our plan will continue to support Canadians through the pandemic and ensure that the post-COVID economy is robust, inclusive and sustainable," Chrystia Freeland told the Commons this week.

Her economic statement will be the firstdetailed fiscal update from the federal government since March 2019. Back then, the Liberals were still in their first mandate. Bill Morneau was the finance minister. COVID-19 didn't exist.

While other countries have produced financial blueprints since the pandemic and the subsequent lockdowns, the Trudeau government initiallyrefused, arguing the pandemic made it impossible to forecast economic growth, or even government spending, with any degree of accuracy.

That's one of the reasons Freeland's update on Monday is generating so much advance interest.

Keep your eye on the ball, says business council

"We're expecting the update will be very pandemic focused and that is good news," said Goldy Hyder, the president and CEO of the Business Council of Canada, which represents more than 150 companies in every sector and region of the country.

"Let's make sure we are managing the crisis at hand and not ... 're-imagining' Canada."

Government sources(who are not authorized to speak publicly) tell CBC News the update will include newbut time-limited spending measuresto deal with the pandemic's economic impact on specific industries and vulnerable Canadians, while laying the groundwork for the policypriorities listed in September's speech from the throne.

They also say the costof the new stimuluswill be in linewith thepercentage of GDP represented byother G7 countries' pandemic plans.

While they would not set out exact details, the measures in the update are expected to include:

• Support forairlines and thetourism and hospitality sector,which have yet to recover from border closures and ongoing lockdowns.

• Money to help long-term care homescontrolinfections.

• Support to helpwomen return to the workplace.

• Some infrastructure projects tied to the government's commitment to reduce greenhouse gas emissions as part of the economic recovery.

Job creation with a green gloss

In 2009, stimulus projects meant to help liftCanada out of the global recession were tied primarilyto putting people back to work.

The focus this time would be on both job creation andhelping Canada meet itsemission reduction targets. Rather just widening a highway, for example, a pandemic stimulus project might alsoinstallcharging stations for electric vehicles. A project torefurbisha hockey arena might include the installation of solar panels.

"Think of these measures as a downpayment on what is to come once we are in the post-pandemic recovery," said one source.

The timing of that recovery is still in flux as Canada awaits shipments of vaccines, and while severeoutbreaks continue to plague many parts of the country.

It's also not clear how much room Freelandstillhas to addto the country's deficit.

Running out of road?

In September, the parliamentary budget officerpegged this year's deficit at $328 billion and that's without factoring in the extension of the emergency wage subsidy and revamped rent relief program that became law just last week, or the top-up to the interest-free loans available for businesses.

Still, the sources suggest the update will include assistance not only for theairlines, hotels and restaurants that have lost business, but fortheir suppliers as well.

Freelandalso is expected to earmark funds to help meet the commitment in the throne speech to set national standards for long-term care facilities which accounted fornearly 80 per cent of the deathsin the pandemic'sfirst wave.

"We can't be going through the same sort of carnage we went through in long-term care in the second wave that we did in the first wave," said another source."That would be irresponsible."

Those sources suggest there will be a down-paymenton effortsto help women in the workforce peoplewho were more likely to lose theirjobs tothe pandemic "she-cession" and less likely to return to work following the first wave.

There could alsobe money to help families coverone-time expenses theyincurred when schools shut down things likelaptop purchases andadditional expenses associated withonlineclasses.

"These are short-term costs," one source cautioned."It's not a long-term commitment to increase the availability of child care across the country."

Economist Armine Yalnizian has written extensively on the impact the pandemic has had on women. In the Financial Post last month, she arguedthat a lack of child care is "the policy chokepoint of a she-covery."

"There will be no recovery without a she-covery, and no she-covery without child care," she wrote. "The sooner we accept the simple facts of pandemic economics, the sooner we can stop making things worse than they need be."

Hyder said that whilebusiness leaders aren't opposed to more spending,he wants to see some commitment from the federal governmentto startbalancing budgets again to signal to financial markets and investors that this country is on a sustainable path.

"This country has 37 million people. The population is aging dramatically. Trade patterns are changing. Our economy is heavily dependent on natural resources," he said. "The question being asked is, 'How are you going to pay this all back?'"

That answer likely willhave to wait until the full budget next spring. In themeantime,Freelandand her cabinet colleagues seem willing to spend whatever they think the countryneedsto deal with the pandemic's second wave.