By Julie Gordon
OTTAWA (Reuters) - Canada on Monday will unveil new spending plans and detail the cost of its emergency support measures as a harsh second wave of COVID-19 infections forces renewed health restrictions across the country.
The so-called Fall Economic Statement (FES) will be the first fiscal planning document drafted by Finance Minister Chrystia Freeland, who took over the role in August. Canada did not draft a budget this year due to uncertainty caused by the pandemic.
"It'll cover how we're rebuilding a strong and resilient economy, and what we're doing to support you through the pandemic," Prime Minister Justin Trudeau said of the FES late on Sunday.
The FES will include initial investments on green stimulus measures and there will be a "down payment" on a national childcare plan announced in September, sources said last week.
It is also expected to include new COVID-19 relief measures for hard-hit sectors. Freeland will plot what the government considers a sustainable path forward, focusing investments that are most likely to spur growth, sources said.
However, the ongoing emergency spending will likely mean a higher deficit than the C$343.2 billion ($264.4 billion) forecast in July.
"We don't really know what the take-up on the new aid programs is thus far," said Benjamin Reitzes, Canadian rates and macro strategist at BMO Economics.
Canada is in the middle of a severe second wave with the seven-day rolling average of new cases well over 5,000 and health officials warning that they could balloon to 10,000 daily cases by mid-December.
But an economic rebound over the summer and recent promising vaccine news has brightened the medium-term outlook, and economists expect bigger stimulus spending will come in the 2021/22 budget due to be published during the first few months of next year.