Opinion: The Liberal stimulus plan is all about politics - The Globe and Mail | Canada News Media
Connect with us

Politics

Opinion: The Liberal stimulus plan is all about politics – The Globe and Mail

Published

 on


Finance Minister Chrystia Freeland receives a fist-bump from Prime Minister Justin Trudeau after unveiling her first fiscal update, in Ottawa, on Nov. 30, 2020.

BLAIR GABLE/Reuters

Despite doubling federal spending this year to about $650-billion, Finance Minister Chrystia Freeland is just getting started.

In her fall fiscal update, tabled Monday, Ms. Freeland announced plans to spend an additional $70-billion to $100-billion over three years on a postpandemic stimulus program – with the details to come later. This is on top of promised investments in a national child care program – no cost estimates for that, either – and provincial demands for more health care cash.

Never has a Canadian government spent so much, so fast, or so insouciantly.

Story continues below advertisement

While there is broad consensus across the political spectrum that investing in child care is the right move for both economic and social reasons, there is no agreement about whether a stimulus package would be either necessary or effective once the pandemic ends.

The promised stimulus, the details of which could be in the next federal budget, appears to be more of a political move by a minority Liberal government preparing for an election than sound policy based on the need for an injection of yet more public money in the economy.

There has, after all, been record amounts of public money doled out in recent months, much of which has ended up sitting in the savings accounts of thousands of Canadians who saw their incomes rise during the pandemic thanks to Ottawa’s largesse. Canadian businesses are also sitting on huge stockpiles of cash, waiting until the pandemic passes to invest it.

“Redeployment of that cash will have a notable impact on the future trajectory of consumer spending and the economy as a whole,” CIBC economists Benjamin Tal and Katherine Judge said in a Nov. 17 report that pegged the “excess cash” held by Canadians at $170-billion.

Rolling out stimulus spending at the same time consumers and businesses are reopening their wallets would serve no useful economic purpose. It will only add to a ballooning federal debt.

Ottawa will still need to come to the aid of individuals and businesses hardest hit by the pandemic for months to come. But it must begin to do so in a more targeted fashion than it has until now. The pandemic will permanently change the configuration of Canada’s economy and propping up businesses unable to adapt to this change could damage the recovery.

In her fiscal update, Ms. Freeland pointed to recent calls by the International Monetary Fund and Organization for Economic Co-operation and Development for governments to “maintain substantial fiscal support through the crisis and recovery phase, where they have space to do so, including by directly stimulating demand through public investment as a complement to transfer programs aimed at supporting household income.”

Story continues below advertisement

Those urgings of the IMF and OECD were not aimed primarily at Canada, which takes the crown when it comes to pandemic-related income supports and other aid measures.

The OECD, for instance, last month found that real household income per capita surged 11 per cent in Canada during the second quarter of 2020. Household income dropped in almost every other developed country outside the United States, plummeting 7.2 per cent in Italy, 3.4 per cent in Britain and 2.3 per cent in France.

For its part, the IMF has reported the combined deficits of Canada’s federal and provincial governments will exceed 20 per cent of the country’s gross domestic product in the 2020-21 fiscal year. The average for eurozone countries is 10.7 per cent. Against this backdrop, the need for additional stimulus here is debatable.

“As economies tentatively reopen, but uncertainty about the course of the pandemic remains, governments should ensure that fiscal support is not withdrawn too rapidly,” the IMF said in a blog post accompanying its October Fiscal Monitor report. “However, it should become more selective and avoid standing in the way of necessary sectoral reallocations as activity resumes”

Public investments in infrastructure should be evaluated based on their long-term economic merits, such as productivity-enhancing and decarbonization measures. Projects that are “shovel ready” often turn out to be a waste of public money.

That was the case after the 2008-09 recession, when the Conservative government of Stephen Harper introduced a $47-billion stimulus program that fell short of its stated goals. Politically motived pet projects got funded, to be sure. But a 2010 Fraser Institute review of the program found that “government spending on infrastructure had little to no effect on Canada’s economic growth during the recovery. Instead, the data demonstrated that private-sector investment and increased net exports were the drivers of economic recovery.”

Story continues below advertisement

That conclusion is now being hotly contested by none other than Ms. Freeland and the federal Liberals, who are planning a stimulus program twice the size of the Harper plan.

What could go wrong?

Even based on the most “optimistic” scenario outlined in Ms. Freeland’s fiscal update, federal spending will approach almost 30 per cent of GDP, far surpassing its previous peak of 24.9 per cent in 1982-83, based on fiscal tables going back to 1966. The best-case scenario sees federal spending falling back below 20 per cent next year, and to about 16 per cent (including interest costs) by 2024-25. The fiscal update provided no information about how this will be achieved.

Instead of dreaming up plans to spend more, Ms. Freeland needs to tell Canadians when and how she intends to spend less. Because that day is coming, whether she admits now it or not.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Let’s block ads! (Why?)



Source link

Politics

‘Disgraceful:’ N.S. Tory leader slams school’s request that military remove uniform

Published

 on

 

HALIFAX – Nova Scotia Premier Tim Houston says it’s “disgraceful and demeaning” that a Halifax-area school would request that service members not wear military uniforms to its Remembrance Day ceremony.

Houston’s comments were part of a chorus of criticism levelled at the school — Sackville Heights Elementary — whose administration decided to back away from the plan after the outcry.

A November newsletter from the school in Middle Sackville, N.S., invited Armed Forces members to attend its ceremony but asked that all attendees arrive in civilian attire to “maintain a welcoming environment for all.”

Houston, who is currently running for re-election, accused the school’s leaders of “disgracing themselves while demeaning the people who protect our country” in a post on the social media platform X Thursday night.

“If the people behind this decision had a shred of the courage that our veterans have, this cowardly and insulting idea would have been rejected immediately,” Houston’s post read. There were also several calls for resignations within the school’s administration attached to Houston’s post.

In an email to families Thursday night, the school’s principal, Rachael Webster, apologized and welcomed military family members to attend “in the attire that makes them most comfortable.”

“I recognize this request has caused harm and I am deeply sorry,” Webster’s email read, adding later that the school has the “utmost respect for what the uniform represents.”

Webster said the initial request was out of concern for some students who come from countries experiencing conflict and who she said expressed discomfort with images of war, including military uniforms.

Her email said any students who have concerns about seeing Armed Forces members in uniform can be accommodated in a way that makes them feel safe, but she provided no further details in the message.

Webster did not immediately respond to a request for comment.

At a news conference Friday, Houston said he’s glad the initial request was reversed but said he is still concerned.

“I can’t actually fathom how a decision like that was made,” Houston told reporters Friday, adding that he grew up moving between military bases around the country while his father was in the Armed Forces.

“My story of growing up in a military family is not unique in our province. The tradition of service is something so many of us share,” he said.

“Saying ‘lest we forget’ is a solemn promise to the fallen. It’s our commitment to those that continue to serve and our commitment that we will pass on our respects to the next generation.”

Liberal Leader Zach Churchill also said he’s happy with the school’s decision to allow uniformed Armed Forces members to attend the ceremony, but he said he didn’t think it was fair to question the intentions of those behind the original decision.

“We need to have them (uniforms) on display at Remembrance Day,” he said. “Not only are we celebrating (veterans) … we’re also commemorating our dead who gave the greatest sacrifice for our country and for the freedoms we have.”

NDP Leader Claudia Chender said that while Remembrance Day is an important occasion to honour veterans and current service members’ sacrifices, she said she hopes Houston wasn’t taking advantage of the decision to “play politics with this solemn occasion for his own political gain.”

“I hope Tim Houston reached out to the principal of the school before making a public statement,” she said in a statement.

This report by The Canadian Press was first published Nov. 8, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Politics

Saskatchewan NDP’s Beck holds first caucus meeting after election, outlines plans

Published

 on

 

REGINA – Saskatchewan Opposition NDP Leader Carla Beck says she wants to prove to residents her party is the government in waiting as she heads into the incoming legislative session.

Beck held her first caucus meeting with 27 members, nearly double than what she had before the Oct. 28 election but short of the 31 required to form a majority in the 61-seat legislature.

She says her priorities will be health care and cost-of-living issues.

Beck says people need affordability help right now and will press Premier Scott Moe’s Saskatchewan Party government to cut the gas tax and the provincial sales tax on children’s clothing and some grocery items.

Beck’s NDP is Saskatchewan’s largest Opposition in nearly two decades after sweeping Regina and winning all but one seat in Saskatoon.

The Saskatchewan Party won 34 seats, retaining its hold on all of the rural ridings and smaller cities.

This report by The Canadian Press was first published Nov. 8, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Politics

Nova Scotia election: Liberals say province’s immigration levels are too high

Published

 on

 

HALIFAX – Nova Scotia‘s growing population was the subject of debate on Day 12 of the provincial election campaign, with Liberal Leader Zach Churchill arguing immigration levels must be reduced until the province can provide enough housing and health-care services.

Churchill said Thursday a plan by the incumbent Progressive Conservatives to double the province’s population to two million people by the year 2060 is unrealistic and unsustainable.

“That’s a big leap and it’s making life harder for people who live here, (including ) young people looking for a place to live and seniors looking to downsize,” he told a news conference at his campaign headquarters in Halifax.

Anticipating that his call for less immigration might provoke protests from the immigrant community, Churchill was careful to note that he is among the third generation of a family that moved to Nova Scotia from Lebanon.

“I know the value of immigration, the importance of it to our province. We have been built on the backs of an immigrant population. But we just need to do it in a responsible way.”

The Liberal leader said Tim Houston’s Tories, who are seeking a second term in office, have made a mistake by exceeding immigration targets set by the province’s Department of Labour and Immigration. Churchill said a Liberal government would abide by the department’s targets.

In the most recent fiscal year, the government welcomed almost 12,000 immigrants through its nominee program, exceeding the department’s limit by more than 4,000, he said. The numbers aren’t huge, but the increase won’t help ease the province’s shortages in housing and doctors, and the increased strain on its infrastructure, including roads, schools and cellphone networks, Churchill said.

“(The Immigration Department) has done the hard work on this,” he said. “They know where the labour gaps are, and they know what growth is sustainable.”

In response, Houston said his commitment to double the population was a “stretch goal.” And he said the province had long struggled with a declining population before that trend was recently reversed.

“The only immigration that can come into this province at this time is if they are a skilled trade worker or a health-care worker,” Houston said. “The population has grown by two per cent a year, actually quite similar growth to what we experienced under the Liberal government before us.”

Still, Houston said he’s heard Nova Scotians’ concerns about population growth, and he then pivoted to criticize Prime Minister Justin Trudeau for trying to send 6,000 asylum seekers to Nova Scotia, an assertion the federal government has denied.

Churchill said Houston’s claim about asylum seekers was shameful.

“It’s smoke and mirrors,” the Liberal leader said. “He is overshooting his own department’s numbers for sustainable population growth and yet he is trying to blame this on asylum seekers … who aren’t even here.”

In September, federal Immigration Minister Marc Miller said there is no plan to send any asylum seekers to the province without compensation or the consent of the premier. He said the 6,000 number was an “aspirational” figure based on models that reflect each province’s population.

In Halifax, NDP Leader Claudia Chender said it’s clear Nova Scotia needs more doctors, nurses and skilled trades people.

“Immigration has been and always will be a part of the Nova Scotia story, but we need to build as we grow,” Chender said. “This is why we have been pushing the Houston government to build more affordable housing.”

Chender was in a Halifax cafe on Thursday when she promised her party would remove the province’s portion of the harmonized sales tax from all grocery, cellphone and internet bills if elected to govern on Nov. 26. The tax would also be removed from the sale and installation of heat pumps.

“Our focus is on helping people to afford their lives,” Chender told reporters. “We know there are certain things that you can’t live without: food, internet and a phone …. So we know this will have the single biggest impact.”

The party estimates the measure would save the average Nova Scotia family about $1,300 a year.

“That’s a lot more than a one or two per cent HST cut,” Chender said, referring to the Progressive Conservative pledge to reduce the tax by one percentage point and the Liberal promise to trim it by two percentage points.

Elsewhere on the campaign trail, Houston announced that a Progressive Conservative government would make parking free at all Nova Scotia hospitals and health-care centres. The promise was also made by the Liberals in their election platform released Monday.

“Free parking may not seem like a big deal to some, but … the parking, especially for people working at the facilities, can add up to hundreds of dollars,” the premier told a news conference at his campaign headquarters in Halifax.

This report by The Canadian Press was first published Nov. 7, 2024.

— With files from Keith Doucette in Halifax

Source link

Continue Reading

Trending

Exit mobile version