After months of refusing to open up himself and his government to any basic standard of fiscal accountability, federal Finance Minister Bill Morneau finally revealed his budget “snapshot” on Wednesday.
What a shocking picture it was!
Days of fevered speculation had most experts wondering if this year’s deficit would reach a staggering $300 billion.
It hit that mark and more, soaring to $343 billion, while the country’s accumulated debt topped $1 trillion for the first time.
These numbers are so far out of whack compared to anything seen before that it’s difficult to fully comprehend the depth of red ink in which we’re swimming. The deficit alone has ballooned more than tenfold in just a few months.
Here’s another way to look at it. Justin Trudeau’s federal government used to budget for around $330 billion in program spending. It has now borrowed in one year more than it used to spend in the government’s entire annual budget.
It’s all driven by the COVID-19 pandemic, of course, and the Trudeau government had little choice in pumping out billions to prop up the economy as Canadians suffer through a (hopefully) once-in-a-lifetime crisis.
But if there’s anything more surprising than the mountainous scale of the money that’s been spent so far, it was Wednesday’s woeful absence of a plan to get beyond the emergency.
In the lead-up to the budget update, Morneau dropped hints that the update would not just be a simple price tag of the rescue package to date.
Morneau also pointed to the bigger challenge that lays ahead, correctly noting that shovelling money out of the back of a truck was actually the easy part.
The more difficult task is formulating a plan to get beyond the pandemic.
On that front, Wednesday’s “snapshot” was definitely fuzzy and out of focus.
The Conservatives got their licks in, of course.
“Trudeau has no plan to help you get back to work or to restart our economy,” said Conservative leader Andrew Scheer, pointing to Canada’s ignominious distinction of having the highest unemployment rate among G7 countries (including Italy, one of the countries hardest hit by the pandemic).
As you listen to the Conservatives complain, keep in mind they did not oppose any of Trudeau’s major spending measures. If anything, they encouraged him to do even more.
But Scheer is correct to point out that Trudeau has offered scant details on how he plans to wean Canadians off expensive programs like CERB.
The CERB has a perverse payout structure, allowing Canadians to earn up to $1,000 a month while still pocketing the $2,000 monthly emergency benefit.
But if you earn $1,001 in a month, you are kicked off CERB, creating a disincentive for many people to take an extra work shift for fear of losing their free cash from the government.
It’s time for Morneau to figure a way out of this trap, and his “snapshot” moment was a missed opportunity.
That was clear in the reaction from small business, the backbone of the Canadian economy.
“Disappointed that the fiscal snapshot provides no changes to the major government support programs to retool them for the recovery phase,” tweeted Dan Kelly, president and CEO of the Canadian Federation of Independent Business.
Small business owners have been pointing out for weeks the many flaws in programs like the CEWS wage subsidy, while also calling for a comprehensive plan to wean Canadians off CERB and get them back to work.
Instead, Morneau bragged that the government has spent more money on COVID-19 relief on a per-capita basis than other developed nations.
The problem is that it’s not sustainable.
“We can borrow that much for one year, but what comes next?” asked Yves Giroux, the independent and non-partisan Parliamentary Budget Officer.
“It’s scary and it’s disappointing because of the sheer level of debt,” Giroux told CTV. “We don’t know what the government plans to do to rein in the spending and go back to more sustainable levels.”
But something tells me Trudeau, Morneau and the rest of the Liberals are not as worried as the budget officer about the longer-term implications of this unprecedented spending spree.
They seem more concerned about the shorter term. The Liberals are riding high in the polls. Trudeau appears to like giving out money as his approval ratings increase.
Leading a minority government, Trudeau may be thinking more about the next election than anything else.
Mike Smyth is host of ‘The Mike Smyth Show’ on Global News Radio 980 CKNW in Vancouver and a commentator for Global News. You can reach him at email@example.com and follow him on Twitter at @MikeSmythNews.