During an appearance on BNN, Canada’s finance minister Chrystia Freeland hinted at the possibility of the government using Canadians’ savings as a “pre-loaded stimulus.”
“Canadian households, it tends to be the better-off households, do have quite a lot of money that they’ve saved. Certainly, it would be great if that money could go towards driving our recovery.” said Freeland referring to a recent CIBC report.
Freeland asked viewers for ideas on how to “unleash” their savings, but Conservative Finance critic Pierre Poilievre sees it as government overreach.
“Folks, lock away your money. Liberals are worried you’re saving too much. They want ‘ideas on how the government can act to unlock’ those savings. No, Trudeau, people’s savings don’t belong to you. Keep your hands where we can see them,” tweeted Poilievre.
According to Freeland, the best-case scenario is the “pre-loaded stimulus” happens by itself.
“We need to find ways to unleash savings into the parts of the economy that need support like tourism, hospitality and domestic services.” said Freeland.
The coronavirus pandemic and the ensuing lockdowns have had a devastating impact on the Canadian economy and Canadians’ finances.
According to Statistics Canada, Canada’s unemployment rate skyrocketed to 13.5% at the beginning of the pandemic. The economy has recovered slightly since then as the unemployment rate currently sits at 8.5%.
While the economy has recovered, Canadians are still struggling financially. According to the affordability index by BDO Canada Ltd. revealed that 2 in 5 Canadians say their personal finances deteriorated during the first wave of the pandemic.
In addition, prior to the pandemic, a MNP report revealed 46% of Canadians were $200 or less away from insolvency prior to pandemic.
The government released the long-awaited fall economic statement last week which projected that Canada’s national deficit could hit $381.6 billion this year and federal debt could reach a whopping $1.4 trillion by March 2021.