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Canadian Fiscal Policies Responses to Covid 19

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Professor’s Name

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Canadian Fiscal Policies Responses to Covid 19

Fiscal policies are governments action that attempts to influence the use of taxation and

spending in the economy. The government uses fiscal policies to manage the growth of demand

in the economy to achieve stability. There are three main types of fiscal policies; the first is a

neutral fiscal policy undertaken the economy is at equilibrium. The second is a contractionary

fiscal policy conducted for the down payment of the government's debt. The third is an

expansionary fiscal policy undertaken to increase the economic level during a recession. Covid

19 has dramatically affected the economy of different governmental sectors, as many employees

jobless, and their source of income significantly reduced by a large percentage. Therefore, this

study would cover how the Canadian government would take immediate, significant, and

decisive policies to support the country and business-facing hardship due to the Covid 19

outbreak in the economy, as discussed below.

First, the Canadian government should hire more employees and create more job

opportunities for its citizen through different emergency companies. For instance, the Canadian

emergency wage subsidy (CEWS) should provide financial relief to many workers across

industries experiencing a substantial reduction in revenue due to the Covid 19 pandemic. These

would provide up to 75 of eligible remuneration, hence would help prevent further job losses and

ease back businesses to normal operations (Padhan et al., 2021). The government should extend

the program of sharing work for the employees. This policy would provide a source of income to

employees eligible for employment insurance, who would agree to reduce regular working hours

due to developments.

Second, the Canadian government should provide financial support, access to credit and

loans in different ways. For example, the Canadian Emergency Business Account (CEBA)
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should offer an affordable interest rate that would cost up to $60,000 to local small businesses to

enable support economic growth and promotes self-employment to sustain a suitable source of

income. Additionally, the Canadian Emergency Rent Subsidy (CERS) should provide direct and

easy access to rental and mortgage subsidy of up to 65% for qualified, eligible business, which

would be straightforward to the tenants (Bernauer et al., 2020). The government guarantees loans

for small and medium-sized enterprises of up to 80% through the business credit availability

program. These financial loans should be used for expenses both in exporting companies and

non-exporting companies. The Canadian government should provide a co-lending program for

medium-sized and small business enterprises. For instance, the business credit availability

program under Business Development Canada (BDC) should provide co-lend term loans of

about $6.25 million. This capital would intend to support bridging businesses in operating

expenses like payroll, rents, utilities, and taxes.

Third, the Canadian government should provide support for self-employed individuals in

different ways. For instance, the Canadian Recovery Benefits would provide weekly capital of

$500 after deduction in withheld taxes of up to 38 weeks. These would help workers who have

their source of income reduced by a minimum of 50% due to the pandemic (De Vito et al.,

2020). Also, the Canada Recovery Sickness Benefit (CRSB) should provide for a maximum

payment of four weeks for employees who cannot work for about 50 percent through the week

due to contracting the virus, which would boost their source of living. Additionally, the self-

isolated patient with underlying conditions should undergo treatment since the public health

authority would make them more susceptible to the pandemic. These would make them spend

less capital on treatment. The Canada recovery caregiving benefit (CRCB) should provide worth
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up to 38 weeks per household for the employees. These would give sufficient care to children

under 12 since the daily care facilities are closed due to the pandemic.

Fourth, the Canadian government should support indigenous businesses in specific ways

to its citizens to enable successful economic growth. For instance, they would provide a capital

of about $306.8 million to help medium and small indigenous businesses finance their business.

(Wei et al., 2021). These would provide rapid economic growth since the goods would be

purchase at affordable prices. These funds would allow short-term interest-free loans and non-

refundable contributions through the aboriginal financing institutions. Additionally, the

government should provide non-repayable capital to support businesses in the First Nation, Inuit,

Metis community, and micro-businesses whose revenue would have been affected by the Covid

19 pandemic. This capital would help businesses and raise revenue for the government to

manage other sectors of the economy.

Conclusion

Overall, the Covid 19 pandemic has caused tremendous loss for countries and economies

worldwide, including Canada. International cooperation and trade h, and locally produced goods

and services are left in large stocks'. These has rendered many employees working in

governmental sectors jobless, and their source income reduced by great percentages. Covid 19

has emerged in every province and territory, with a concentration of over thousands of diagnosed

active cases and more deaths. Therefore, Canadian government should take immediate

significant and decisive policies to help the country, business-facing hardship due to Covid 19,

have successful economic growth. This would boost most of the employee’s salaries working in

government and non-governmental employees.

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References

Padhan, R., & Prabheesh, K. P. (2021). The economics of COVID-19 pandemic: A

survey. Economic Analysis and Policy, 70, 220-237.

Bernauer, W., & Slowey, G. (2020). COVID-19, extractive industries, and indigenous

communities in Canada: notes towards a political economy research agenda. The

extractive industries and society, 7(3), 844-846.

De Vito, A., & Gómez, J. P. (2020). Estimating the COVID-19 cash crunch: Global evidence and

policy—Journal of Accounting and Public Policy, 39(2), 106741.

Wei, X., & Han, L. (2021). The impact of COVID-19 pandemic on the transmission of monetary

policy to financial markets. International Review of Financial Analysis, 74, 101705.