Too good to be true

Since the start of the pandemic, Justin Trudeau’s government has spared no opportunities to announce aid measures of any kind without worrying about the costs. The urgency of supporting individuals and businesses was the only criterion for intervention, with the perverse effects inherent in such an improvised ball.

Even before Wednesday’s Speech from the Throne was read, Ottawa was heading for a deficit almost 20 times the $ 20 billion last year. A deficit alone greater than the total spending of $ 350 billion recorded in 2019, an election year.

After reading the speech, many felt that we have entered a fabulous era where the cost of political commitments is irrelevant, where only the popularity of the announced measures counts.

Of course, the health and economic emergency justified Ottawa’s rapid injection of tens of billions which became hundreds in the space of a few months. Without these billions, we would all have been plunged into a possibly catastrophic spiral.

In mid-August, the rate of “labor underutilization” as calculated by Statistics Canada (unemployed, inactive people who would like to work and workers whose hours have been reduced by at least half) was still 20.3% compared to 36.1% in April, but 11.2% before the pandemic. Federal money is therefore still necessary to avoid a relapse. So we can only welcome the decision to extend the wage subsidy program until June 2021 and replace the popular PCU with increased access to employment insurance. It was time to expand eligibility for this program, created at the end of the Great Depression of the 1930s, but reserved for a minority of workers struggling since the reforms of the 1990s.

That being said, we must hasten to remind that, if Ottawa can afford so many largesse in a time of a pandemic, it is because its finances were in good shape when the Liberals took power in 2015. And it is also because interest rates are practically zero and could stay that way for a long time. This reassures the rating agencies, only one of which, to date, Fitch Ratings, has downgraded Ottawa’s credit rating from AAA to AA +.

Where the shoe pinch is that the Trudeau government, still in the minority in the House, confuses its duty to adopt all the temporary emergency measures that are necessary despite their very high cost with its own political ambitions made of promises to long term, each more ambitious than the next.

In declaring the end of the session last month, Mr. Trudeau said he saw it as an opportunity to revive the economy with an unprecedented green plan. Now, the second wave of the pandemic offers it on a silver platter the pretext of maintaining the pace of spending adopted since the spring by magically including a range of unrelated promises.

For example, it is one thing to help the provinces increase the salaries of front-line health workers, and it is quite another to reduce the commitment to create a drug insurance program to a few months before the elections.

In the same vein, it is one thing to take responsibility for the additional costs of a temporary improvement in employment insurance accompanied by a temporary freeze on contributions, it is another to commit to reform. the plan permanently without saying anything about its funding.

This sudden unlimited lavishness on the part of the federal government, justified by the continuing crisis, has taken on so much importance in the daily lives of Canadians that many community and private organizations, employers and unions, provincial and municipal, now believe they are entitled to put back on the table all the claims accumulated over the years. Yet, let’s face it frankly, no matter which government is in power in Ottawa, no one can afford to inflate their spending every year by the equivalent of the total amount spent the previous year, or even by half or a third, simply by shoveling the shortfall on the debt of the next generations.

The time is not for austerity, Mr. Trudeau rightly repeated, but it will inevitably be sooner rather than later if this government confuses the demands of intervention in times of crisis with those of responsible financial management. long-term public policies.



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