Finance Minister Chrystia Freeland delivering fiscal update remotely after staffers test positive for COVID-19

Finance Minister Chrystia Freeland plans to release an updated accounting of federal finances today and provide the government's economic outlook for the coming months.

Deficit may be smaller than $155 billion projected in 2021 budget

Minister of Finance Chrystia Freeland walks to a news conference in Ottawa in April, before delivering the government's budget for this year. (Adrian Wyld/The Canadian Press)

NEW: Freeland tables 'omicron-centric' fiscal update that pledges billions in support as COVID-19 cases rise

Finance Minister Chrystia Freeland is to release an updated accounting of federal finances today and provide the government's economic outlook for the coming months.

But that update will not be delivered in the House of Commons itself.

After two of her staff members tested positive for COVID-19 using rapid tests, Freeland said Tuesday afternoon she would present the document virtually.

Freeland said she tested negative twice on Tuesday using molecular tests and not been in direct contact with the staff members.

"The Omicron variant is a real and serious threat to the health and safety of Canadians. I encourage everyone to follow all public health measures: book your booster shot, wear a mask, and limit social gatherings," she said in another tweet.

The fiscal update comes as daily COVID-19 case counts rise in much of the country, particularly in Ontario and Quebec. On Friday, federal modelling showed that daily cases could significantly increase as the omicron variant establishes itself in Canada.

The new variant has sparked fears of renewed restrictions, more stress on the health care system and another economic slowdown.

Deficit, inflation key concerns

The update, also called the fall economic statement, will follow up on projections made in the budget this April during a different stage of the pandemic and before the Liberals were re-elected in September.

The government predicted the deficit for last fiscal year would be $354.2 billion, and nearly $155 billion this year.

But federal books could have billions more in extra fiscal space, helped along by higher oil prices, which also have helped to push up inflation rates.

Freeland didn't directly answer a question Monday about how that will be reflected in today's update, saying she would have more to say once the document is released.

While the Liberals promised billions in new spending during the election campaign, the Finance Department has sent signals that the update won't offer a long list of new spending measures.

Tiff Macklem, governor of the Bank of Canada, speaks during a news conference on Oct. 28, 2020. The Bank's updated mandate, including to keep inflation at two per cent, was detailed Monday. (Sean Kilpatrick/Bloomberg)

One measure was unveiled Monday as the government set aside $40 billion to compensate First Nations children and undertake long-term reforms to the child welfare system.

Economists suggest that some promised spending might be delayed because it could add to inflationary pressures.

While the Bank of Canada has a mandate to keep inflation in check, the government agreed Monday it plays a role in helping the central bank maintain inflation around its two per cent target.

BMO director of Canadian rates Benjamin Reitzes said the wording could offer a sign that the government recognizes it is time to stand down a bit on its stimulus spending.

Freeland is facing calls for more benefit spending from labour groups, and requests from business groups for a plan to deal with supply-chain issues, the "Buy American" provisions the White House is pushing and domestic labour shortages.

Dennis Darby, president of Canadian Manufacturers and Exporters, said the issues could weaken the economic rebound from COVID-19.

With files from CBC News

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