Question

The federal government of Canada released it's fiscal plan for 2020-21 this week. I would like you to comment on the specific policy tools or strategies that the government is planning to use to help an economic recovery. Canada’s COVID-19 Economic Response Plan is delivering swift and significant support to Canadians.

The Canada Emergency Wage Subsidy is helping about 3 million workers keep their jobs. The Canada Emergency Response Benefit (CERB) is helping 8 million Canadians pay their bills.

The Canada Emergency Business Account has helped 688,000 small businesses stay afloat. We are helping Canadians get back on their feet as our economy safely reopens. Together, we all play an important role in getting through this.

Answer 1

The COVID-19 led pandemic has caused severe disruptions in economies all over the world and Canadian economy is no exception. To understand how the specific policies going to help Canadian economy revive growth but first we need to understand how COVID-19 pandemic caused disruptions in the economy.

Due to COVID-19 pandemic economies has been forced shutdown leading to mass unemployment which in turn caused the demand to fall. When demand in the economy falls, production falls and as result unemployment rises more and this vicious cycle goes on which we know as "recession".

So to revive economy the federal government of Canada has announced very important policies. Which involves wage subsidy to 3 million people, Canada emergency response benefit (CERB) which will benefit 8 million people pay their bills. Canada emergency business account has helped 688,000 small businesses to stay afloat.

Let's understand how each policy will help the economy to revive growth. Let's consider the wage subsidy first. The wage subsidy helps the employers to keep their employees at work since the government is now paying part of the wage. This helps improve employment opportunities and reduces unemployment. More employment means more production and more demand, which helps economy grow.

Now let's see Canada emergency response benefit which help 8 million people pay their bills, in times as such when purchasing power of consumers is depressed its important for the government to help people. Reducing their burden of bills will help them consume more and demand more goods and services. A higher demand in economy will lead to more production and more employment which helps the economy to revive.

And finally at times as such small business firms also require assistance since their revenue has been dried up. The Canada emergency business fund is very important in order to ensure that small business firms survive this pandemic and remain operational. The emergency business fund will help 688,000 small business to remain operational and survive this pandemic. Because in order to support demand we need the production side to be responsive we can't let small businesses to shut down. So that's why all these steps very important for the revival of Canadian economy in post covid era.

I hope I was able to help you. Thank you.