Former federal finance minister Bill Morneau says he thinks Prime Minister Justin Trudeau and the Liberal government he used to be a part of “probably” spent too much on COVID-19 stimulus. Now, he’s “worried” about the potential for a recession this year.
In an exclusive interview with CTV News’ Chief Political Correspondent Vassy Kapelos airing Sunday on her debut episode of CTV’s Question Period at 11 a.m. ET, Morneau said that in hindsight, the amount of economic stimulus and COVID-19 aid the federal government poured into the Canadian economy during the worst of the global pandemic, may have been too much.
Morneau said that when you look around the world, Canada was one of the countries that “did a good job” when it came to supporting its citizens through the tumultuous time, but “was there too much? Probably.”
“But getting it exactly right, that’s tough. So I think now that we have the benefit of seeing what transpired, I think we need to be very cautious given that we know that the economic environment that we’re facing is challenging,” Morneau said.
According to a recent Auditor General report calling out eligibility verification shortcomings in the Liberals’ rollout of COVID-19 financial programs, the Liberals spent an estimated $211 billion on COVID-19 aid.
The biggest ticket benefit programs were the Canada Emergency Wage Subsidy (CEWS), which paid out $100.7 billion to 460,000 businesses seeing 5.3 million employees kept on the payroll, and the Employment Insurance benefit which evolved into the Canada Emergency Response Benefit (CERB), and saw $74.8 billion sent to 8.5 million Canadians.
Morneau’s comments build on a perspective he expresses in his forthcoming and revealing new book ‘Where To from Here: A Path to Canadian Prosperity’ which delves into both his time in one of the top political positions in the country and what led him to resign in August 2020, as well as his views about the country’s future economic potential.
While Morneau left the federal cabinet six months after the Liberals started rolling out billions of dollars in financial aid to Canadians and employers—amid tension with Trudeau over what he considers a difference of opinion over tapering off COVID-19 aid— during his time in the top fiscal position, Morneau did defend the federal government’s economic approach.
“I think I need to be really clear, the response to COVID— the initial response— I think, was the right response,” Morneau said in the interview. Other examples he gave of economic programs he thinks the government has gotten right are the Canada Child Benefit and expanding the Canada Pension Plan, while he thinks programs aimed at encouraging investment such as the Canada Infrastructure Bank weren’t followed through on “as well as we could have.”
“One of the challenges while I was there, and now, is having a focus on a few things that are going to make a big difference, rather than dealing with everything that comes your way on a day-to-day basis,” Morneau told Kapelos. “And, you know, as someone who came from business, it’s not a new challenge.”
‘I DO WORRY ABOUT THE POTENTIAL FOR A RECESSION’
The former finance minister is not the first high-profile economic voice to suggest that Canada may have rolled more economic aid than prudent out the door, for too long. In September, Bank of Canada deputy governor Paul Beaudry said governments and central banks should have withdrawn stimulus measures earlier, as doing so would have likely resulted in lower inflation, as The Canadian Press has reported.
Now, amid ongoing high inflation, Morneau says that while the Central Bank’s “only appropriate response” is to raise interest rates, he is among the economic observers who is concerned about the country’s current economic situation.
“I think the challenge that we’re facing now is obviously significant,” Morneau said. “Inflation is hugely problematic for people to deal with. And so, when you raise interest rates, inevitably there’s less investment. So I do worry about the potential for a recession in 2023.”
“My hope is that if we have one, it will be shallow recession, and one that we would we be able to come out of,” he continued.
Morneau said this means the government’s current focus on fiscal prudence is “doubly important.”
“We really need to make sure that we’re not adding to the challenge with government actions,” he said.
DOES HE THINK TRUDEAU IS AN EFFECTIVE ECONOMIC MANAGER?
Kapelos had to ask Morneau twice to get a direct response as to whether he thinks his former boss is an effective manager of the economy.
After initially speaking about how he thinks the federal government is currently “rightly focused” on Canadians’ concerns about the economy, and how there needs to be better long-term planning with both the provinces and the private sector when it comes economic growth, Morneau said “everyone can do better.”
“Look, I think we could have done better while I was there. I think that the government can do better now,” he said.
“And, I think being an effective manager means focusing on a few things that are critically important and doing them every day. The challenge of the 24/7 news cycle response is that takes your eye off the ball. And so for me, growth in the economy, long-term solutions to a health-care crisis that continues to repeat itself… and thinking about that energy transition, they all need that perspective.”
With files from CTV News’ Chief Political Correspondent Vassy Kapelos and CTV’s Question Period associate producer Spencer Van Dyk
UPEI students offered $1,500 to leave residence during Canada Games – CBC.ca
Some UPEI students are earning extra money during the mid-semester break this year, simply by packing up and leaving campus.
The 2023 Canada Winter Games Host Society offered $1,500 each to students living in Andrew Hall if they give up their residence rooms to make space for arriving athletes.
The students have to leave a few days before the break starts, on Feb. 17, and can return March 7. They also had to give up their meal plan for the duration.
Many athletes are staying at UPEI’s new 260-bed residence, built to meet accommodation requirements for the Games’ temporary athlete village.
But Wayne Carew, chair of the Games, said there are 120 more athletes coming than originally planned.
“We ended up getting 44 rooms [in Andrew Hall] and that’s great,” said Carew.
He said the athletes staying at UPEI “are going to have a wild experience on the campus of the beautiful University of Prince Edward Island.”
Carew said the costs of doing this are a “lot cheaper” than arranging accommodations elsewhere. But he said the main reason is to provide all athletes the same, “once-in-a-lifetime” experience.
“Where they live, the food and the camaraderie and the experience of a lifetime: that’s what they’ll remember in 20 years’ time about P.E.I.,” he said.
‘Pretty good deal’
Some students were eager to take the organizers up on their offer.
“I’m going away to Florida during the two-week break anyways. So I was like, ‘May as well let them use my room then,'” said Hannah Somers.
“It’s $1,500. Pretty nice,” said Benji Dueck, who agreed to vacate the room with his roommate. “We’re moving out, living with a friend in the city. So, sounds like a pretty good deal to me.”
As part of the agreement, the students had to clear out their rooms. Canada Games organizers made arrangements so students could store their belongings.
But not all students thought it was a good deal.
“I’m not giving up my spot in Andrew Hall for $1,500,” said Maria de Torres. “It’s just too hard to pack up. It’s just too hectic. And since I’m an international student, I got a lot [of things] right now.”
Shelby Dyment is also staying in Andrew Hall. Dyment said she and her roommate are working as residence life assistants during the mid-semester break and she’s also doing directed study, so she has to stay on campus.
“There’s a lot of people doing it. It’s just for our situation it just wasn’t working for what we were doing,” she said.
In a statement, UPEI said that enough students had accepted the offer to host all the athletes.
It said the host society made all the arrangements with the students, including paying for their incentives and arranging for storage.
Organizers expect about 3,600 athletes, coaches and officials to participate in the Games. The event will run from Feb. 18 to March 5.
Germany won't be a 'party to the war' amid tanks exports to Ukraine: Ambassador – CTV News
The German ambassador to Canada says Germany will not become “a party to the conflict” in Ukraine, despite it and several other countries announcing they’ll answer President Volodymyr Zelenskyy’s pleas for tanks, possibly increasing the risk of Russian escalation.
Sabine Sparwasser said it’s a “real priority” for Germany to support Ukraine, but that it’s important to be in “lockstep” coordination with other allied countries.
“There is a clear line for Germany,” she told CTV’s Question Period host Vassy Kapelos, in an interview airing Sunday. “We do want not want to be a party to the conflict.”
“We want to support, we want to do everything we can, but we, and NATO, do not want to be a party to the war,” she also said. “That’s I think, the line we’re trying to follow.”
Defence Minister Anita Anand announced this week Canada will send four Leopard 2 battle tanks — with the possibility of more in the future — to Ukraine, along with Canadian Armed Forces members to train Ukrainian soldiers on how to use them.
Canada first needed permission from Berlin to re-export any of its 82 German-made Leopard 2 tanks to Ukraine. After a meeting of 50 defence leaders in Germany earlier this month, it was unclear whether Germany would give the green light.
But following what German Chancellor Olaf Scholz called “intensive consultations,” Germany announced on Jan. 25 it would send tanks to Ukraine, and the following day, Canada followed suit. It is now joining several other countries, including the United States, the United Kingdom, and Poland, which are sending several dozen tanks to Ukraine.
NATO Secretary General Jens Stoltenberg said this week the tanks would allow Ukraine to “significantly strengthen their combat capabilities.”
“It demonstrates also the unit and the resolve of NATO allies in partners in providing support to Ukraine,” he said.
Meanwhile Sparwasser said Germany is “walking that fine line” of avoiding steps that could prompt escalation from Russia, while supporting Ukraine, and staying out of the war themselves.
“I think it’s very important to see that Germany is very determined and has a real priority in supporting Ukraine in its struggle for freedom and sovereignty,” Sparwasser said. “But we also put a high priority on going it together with our friends and allies.”
Sparwasser said despite warnings from Russia that sending tanks to Ukraine will cause an escalation, Germany is within international law — specifically Article 51 of the United Nations Charter — to provide support to Ukraine.
“Ukraine is under attack has the right to self defence, and other nations can come in and provide Ukraine with the means to defend itself,” Sparwasser said. “So in international law terms, this is a very clear cut case.”
She added that considering “Russia doesn’t respect international law,” it’s a more impactful deterrent to Russia, ahead of an expected spring offensive, to see several countries come together in support of Ukraine.
With files from the Associated Press
COVID: Canada retaining Evusheld – CTV News
While Health Canada says it is “aware” of the U.S. decision to withdraw the emergency use of Evusheld, a drug by AstraZeneca used to help prevent COVID-19 infection— the agency is maintaining its approval, citing the differences in variant circulation between Canada and the U.S.
The U.S. Food and Drug Administration (FDA) announced on Jan. 26 that its emergency use authorization of the drug was pulled due to its inefficacy in treating “certain” COVID-19 variants.
The FDA stated in a release on its website that as the XBB.1.5. variant, nicknamed “Kraken”, is making up the majority of cases in the country, the use of Evusheld is “not expected to provide protection” and therefore not worth exposing the public to possible side effects of the drug, like allergic reactions.
In an email to CTVNews.ca, Health Canada said the U.S. Food and Drug Administration pulled the drug as the main variant of concern in the U.S. is XBB.1.5.
“Dominant variants in the [U.S.] may be different from those circulating in Canada,” the federal agency said in an email. “The most recent epidemiological data in Canada (as of January 1, 2023) indicate that BA.5 (Omicron) subvariants continue to account for more than 89 per cent of reported cases.”
On Jan. 6 the FDA said in press release that certain variants are not neutralized by Evusheld and cautioned people who are exposed to XBB.1.5. On Jan. 26, the FDA then updated its website by saying it would be limiting the use of Evusheld.
“Evusheld is not currently authorized for use in the U.S. until further notice by the Agency,” the FDA website states.
On Jan. 17, Health Canada issued a “risk communication” on Evusheld, explaining how it may not be effective against certain Omicron subvariants when used as a preventative measure or treatment for COVID-19.
“Decisions regarding the use of EVUSHELD should take into consideration what is known about the characteristics of the circulating COVID-19 variants, including geographical prevalence and individual exposure,” Health Canada said in an email.
Health Canada says Evusheld does neutralize against Omicron subvariant BA.2, which according to the agency, is the dominant variant in many communities in Canada.
The drug was introduced for prevention measures specifically for people who have weaker immune systems and are unlikely to be protected by a COVID-19 vaccine. It can only be given to people 12 years and older.
“EVUSHELD is not a substitute for vaccination in individuals for whom COVID-19 vaccination is recommended,” the agency’s website reads.
Health Canada says no drug, including Evusheld, is a substitute for vaccination.
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