Canada’s COVID bill will be stiff

By Letter to the Editor on April 17, 2021.

When the bottom line is flush and the public coffers are overflowing with milk and honey, budgets can be a relatively pleasant experience for governments which can parcel out largesse in a celebration of democratic pragmatism to nearly every department and ministry that is holding their hand out.
Governments in Canada are rarely good at saving, and the temptation of an eye-popping surplus usually ensures those dollars will be funneled into program spending or catching the eye of the prospective voter rather than locked down in a “rainy day fund.”
Governments will roll out all kinds of statistics and leveraged estimates and debt-to-GDP ratios to justify why it’s “smart” to spend those dollars today, rather than put them aside for the future. It is not often when a premier or prime minister announces a surplus is going to be used for savings or debt reduction instead of some flashy new program or infrastructure investment. Say what you will about the long-term consequences of that line of thinking, but an emphasis on fiscal prudence isn’t always a guarantee of votes at the ballot box.
Not that an abundant and overflowing surplus is expected to materialize next week when the Trudeau Liberals table the federal budget. Quite the opposite, actually.
While the national economy nosedived into lockdown last spring, those anticipating a tight-fisted approach to the pandemic’s financial downpour would be rudely awakened from that daydream. Huge financial support programs, grants, and other supports were rolled out within days as Canadians worried about their health, their future, and most especially their bottom lines.
While much of the support rolled out by the Liberals was no doubt necessary to keep the wolf from the door for hundreds of thousands of cash-strapped and out-of-work citizens, at some point the chickens come home to roost. And judging by the hundreds of billions that have been spent so far, once Canadians get a good look at the bill it won’t just be our feathered friends that might be laying an egg.
Not to mention the fact that Monday’s federal budget will be the first time Canadians have seen a full accounting of the government’s spending during the pandemic, in fact the first budget we’ve seen since 2019.
Opposition parties have long cried foul over that little omission, and it appears to be hard to defend on the part of the Liberals. If the fiscal floodgates were thrown open in the wake of COVID-19, what other purpose is served by keeping that information from the Canadian public than obfuscating what might not be an altogether rosy picture about the state of government finances?
Speculation continues to mount about whether Monday’s budget will be a prelude to an election call. With the O’Toole Conservatives currently sagging in the polls the Liberals may feel the time is right to secure another coveted majority from the Canadian electorate. If that is indeed Trudeau’s intention – no matter what the state of the nation’s books next week – don’t expect to see an exposition of fiscal parsimony in the budget if vote-grabbing is the intention of the day.