Fiscal and monetary tools have helped offset COVID-19

Article Excerpt

Canada continues to deal relatively well with the COVID-19 pandemic compared to its southern neighbour. To date, the infection rate and deaths as a percentage of the total population have been much smaller than those in the U.S. This is in part because the Canadian government acted aggressively to counter the economic impact of the COVID-19 pandemic and keep workers at home. Key tax and spending measures amounting to $317 billion (or 15% of GDP) include: $20 billion to the health care system to support increased testing, vaccine development and medical supplies; $212 billion in direct aid to households and firms, including wage subsidies, payments to workers without paid sick leave and access to employment insurance, and an increase in existing GST tax credits and child care benefits; plus $85 billion in liquidity support through tax deferrals. Central banks around the world have rushed to help soften the blow to economic activity caused by the COVID-19 pandemic. In both the U.S. and Canada, both central…