The Canadian government isn't ready to put the brakes on its economic stimulus.
Today, Prime Minister Justin Trudeau announced that a 75 percent wage subsidy for employers will be extended until the end of August.
This comes in the wake of Statistics Canada reporting that three million people lost their jobs in March and April as a result of the COVID-19-induced economic contraction.
On April 30, the parliamentary budget officer, Yves Giroux, released an updated economic scenario assuming a decline in real gross domestic product of 12 percent in 2020.
According to Giroux, that would translate to a $252.1-billion federal deficit in 2020-21.
This would boost Canada's federal debt-to-GDP ratio to 48.4 percent.
That would remain significantly lower than the peak reached in the mid 1990s when then Liberal finance minister Paul Martin dramatically slashed transfer payments to the provinces.
Trudeau also announced $450 million in new funding to support university research.
Some of this will include wage supports so that academic institutions and health research institutes can retain research staff ordinarily funded by industry and philanthropy.
Like with the federal wage subsidies, Ottawa will provide 75 percent of the funding per person, up to a maximum of $847 per week.
In addition, funding of up to 75 percent of eligible costs will go to ensure that universities and health research institutes can maintain "essential research-related activities".
“Research staff in Canada are the source of new innovations and ideas that help keep us healthy, protect our environment, and drive our economy," Trudeau said. "We are fortunate to have some of the world’s brightest minds. Today, we are making sure Canadian universities and health research institutes have the support they need to sustain their research capacity through this difficult situation, and continue to attract and retain talent, for the benefit of all Canadians.”
The announcement was welcomed by Santa Ono, the president of the University of British Columbia.
"We thank the Canadian government for today's announcement of $450M in support of researchers at universities and research institutions to be provided via the Granting Councils," Ono tweeted. "This will ensure the continued strength of Canada's research universities."