Monday’s fiscal update was a lesson in big numbers. Very big numbers.
By the end of this fiscal year, dealing with the COVID-19 pandemic will mean a single-year federal deficit of $381.6 billion — and perhaps as much as $400 billion if the broadening second wave of the pandemic causes more lockdowns.
Yes, that’s billions, folks, with a “b.”
Or, to put it in a different sort of context, $10,150 in new federal debt for each and every single Canadian.
It’s staggering to think about.
The scarcity of details has led opposition parties to suggest that the federal government is keeping its powder dry for a showy, possibly pre-election blitz in the spring.
But it’s also hard to say that the spending wasn’t and isn’t necessary — or that there’s also going to need to be even more spending over the next few years to get the economy moving again and back on an even keel.
Here’s Finance Minister Chrystia Freeland, speaking to reporters at a news conference on the update in Ottawa: “I want Canadians to know we have a plan to get through the winter. We have a plan to provide vaccines to Canadians and we have a plan to build our economy back in the spring.”
There may well be plans for all three of those serious issues, but the best you can say is that they are nebulous ones right now; the details about how things are going to work are sketchy at best.
The rebuilding plan won’t come until the next budget but the federal government has said it plans to spend between $70 billion and $100 billion to help get things back on track. The scarcity of details has led opposition parties to suggest that the federal government is keeping its powder dry for a showy, possibly pre-election blitz in the spring. For anyone other than politicians, though, there are plenty more things to worry about during the pandemic than the next election campaign.
Something that’s interesting to consider? What Freeland said about how the burden of paying for COVID-19 is being carried across the country — at this point, $8 out of every $10 spent fighting the pandemic has been federal money.
Something else to keep in mind? Much of the billions that have been spent — and will be spent this year — is one-time spending, not spending that will have to be brought under control because it’s become a structural issue for government. It’s not ballooning program costs or increased wages and benefits. And debt-to-gross-domestic-product ratios still haven’t reached where they were in the mid-1990s.
There is also one significant plan for what happens next.
When it comes to taxing internet giants like Amazon, Netflix and Airbnb, it’s about time. The question is a simple one: why should massive international conglomerates get a free ride on things like sales taxes, especially when local small- and medium-sized businesses don’t?
It’s about time that stopped.
