Federal projected spending on direct supports due to COVID-19 hits $145B

The federal government now projects that it will spend more than $145.6 billion on direct support for Canadians as a result of the COVID-19 crisis.

Those direct support programs account for approximately one fifth of the overall tally of the measures the government has announced related to the pandemic.

Ottawa estimates that overall total — including measures to protect Canadians health and safety and to provide business and tax liquidity support as well as the direct support for individuals, businesses and sectors — amounts to more than $817 billion.

But much of that is not spending that will end up on the books. For example, a large portion, $300 billion, is a measure by the Office of the Superintendent of Financial Institutions (OFSI) to free up capital for the banks.

Another big part of that overall total are tax deferrals and credit and loan guarantee programs:

  • Credit and liquidity supports through the Bank of Canada and CMHC are projected at $200 billion.
  • Income and sales tax deferrals are estimated at $85 billion.
  • Liquidity support for businesses, homeowners and the agricultural sector is estimated at more than $286 billion.

But while there is a cost associated with those programs, deferrals, credit support and monetary measures essentially just put off when the government gets paid.

The additional emergency funding and the direct support measures that will have the biggest impact on the deficit and debt in the government’s financial books.

  • $73 billion: Canada emergency wage subsidy
  • $35 billion: Canada emergency relief benefit
  • 15.3 billion: Canada emergency business account
  • $5.5 billion: GST credits
  • $9 billion: Financial aid to students
  • $1.7 billion: Orphan well clean up

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