At some point, Freeland will have to tell us we can’t spend what we can’t afford, writes Jack Mintz in the Financial Post. Below is an excerpt from the article, which can be read in full here.
By Jack Mintz, October 1, 2020
Judging from Finance Minister Chrystia Freeland’s Sunday interview on Global TV, I suspect she did not have a good week. She was stuck defending the throne speech’s breathtaking permanent spending plans. Her replies, almost refuting the Liberal promises, failed to allay concerns over the growing mountain of debt and taxes implied by the burgeoning federal budget.
Freeland was spot-on to say “not all spending is equal.” Temporary financial supports provided during the pandemic are very different from new permanent spending. What is not clear, though, is how temporary support won’t become permanently guaranteed income. Paying people not to work can eventually hurt recovery as businesses try to hire workers back. And some support is poorly targeted. As documented by the Fraser Institute, $22 billion in COVID spending may have gone to Canadians with more than $100,000 in income, via CERB, student support and temporary boosts to Old Age Security.
The new permanent spending signalled in the throne speech is even more of a concern. Answering a question about debt, Freeland said the government would take a time-honoured “cautious” approach, something we have not actually seen recently. As minister of finance, she should be worried about endless demands that could result in hundreds of billions of dollars in deficits or new taxes this decade. Right now, I strongly suspect there is no plan.
The permanent spending promises read like a campaign document: early learning and childcare, long-term care, expanded EI reforms to include the self-employed, pharmacare, climate change spending on building retrofits and electric cars, a permanent OAS boost at 75, a disability benefit similar to the Guaranteed Income Supplement, affordable housing, water treatment and housing for Indigenous Canadians, rural broadband and support for regional airline routes. Oh, did I mention worker-training programs?
***TO READ THE FULL ARTICLE, VISIT THE FINANCIAL POST HERE***