Trudeau launches student support, defends fiscal record after credit-rating cut

Prime Minister Justin Trudeau defended his government's fiscal record on Thursday as it launched several new programs promising billions of dollars in new support for students.

The moves came one day after Canada saw its credit rating degraded by one major agency, over the massive increase in government spending meant to help Canadians through the COVID-19 pandemic.

The launch of the Canada Student Service Grant, which is the centrepiece of Ottawa's new support to students, comes two months after it was first announced by Trudeau and just in the nick of time for younger people who haven't been able to find summer jobs.

Back in April, Trudeau announced plans for the grant, a way of giving students chances to earn some money while volunteering in "national service" activities related to fighting the pandemic.

Eligible students are to receive grants of $1,000 to $5,000 to support the costs of post-secondary education in the fall, with the amount of each grant dependent on the time devoted to volunteer work.

The grant program is part of a multi-pronged, $9-billion investment by the federal government to cushion the economic impact of the pandemic on young people that also includes money for thousands more summer-job placements and internships.

"There are fewer jobs and many co-op, internship and community-service placements because of the pandemic," Trudeau said during one of his regular COVID-19 news conference outside his Ottawa home.

"So if you're a student and new grad, we're creating tens of thousands of jobs for you. We're making sure that you can still learn new skills, gain valuable work experience, make money for the year ahead and contribute to your community."

Yet even as Trudeau was promising more support for students as part of Ottawa's broader effort, he faced questions about his government's handling of the country's finances.

The questions were sparked by one of the three largest credit-rating agencies in the United States, Fitch Ratings, announced Wednesday that it was downgrading Canada's credit rating from triple-A — the highest possible score — to AA+.

Fitch blamed the move on "the deterioration of Canada's public finances" due to the COVID-19 pandemic, adding public health measures needed to slow the spread of the illness and depressed oil prices "will cause a severe recession" in Canada this year.

Trudeau, who has faced criticism from the official Opposition Conservatives for overseeing years of federal deficits prior to the onset of the pandemic, defended his government's record and was unapologetic about having spent billions during the pandemic.

"We came into this situation with one of the best balance sheets in the G7, and we put that to work for people," he said.

"We've made sure through various programs that Canadians could not only protect themselves through this pandemic, but also hold our economic standing so that when we get out of this, as we restart, our economy will come roaring back."

The Liberals' latest estimate of the cost of the total package of pandemic-related aid was about $153.7 billion, but the parliamentary budget officer's running tally estimates the cost at $169.2 billion.