Chrystia Freeland seemed only too happy on Wednesday to mention some recent grumbling about the Liberal government’s pandemic spending over last year.
For most of 2020, the government was faced with questions about whether it was delivering financial supports fast enough and broadly enough. Now, some are wondering aloud whether the government spent too much.
“I’ve been surprised to read some commentary suggesting that Canadians may be doing too well for their own good,” the finance minister said. “Some have pointed to rising household disposable income in the first nine months of last year as evidence that our government acted too swiftly and too effectively to support Canadians.”
It will not surprise you to learn that Freeland disagrees with that take.
And if Freeland is eager to note that criticism, surely it’s because she and the government know how difficult it might be for any of their political opponents to campaign against any of the specific measures the Liberals took to support Canadian households over the past 12 months.
But it remains to be seen how all that spending — and the historic deficit that resulted from it — will frame the political debate going forward.
“Although households did experience notable declines both in wages and salaries and in self-employment income in the second quarter, the value of COVID-19 support measures provided by governments more than compensated for those losses,” StatsCan said.
Before April 2020 and June 2020, StatsCan estimates, the households that had less than $26,500 in disposable income for 2019 saw their disposable income increase by 33.6 per cent. For those households with more than $64,900 in disposable income in 2019, the increase in disposable income in the second quarter of 2020 is estimated at 7.1 per cent.
A person walks through an almost deserted Yorkdale Shopping Centre as Toronto enters the first day of a renewed coronavirus lockdown on Nov. 23, 2020. (Carlos Osorio/Reuters)
As of October 3, 2020, the federal government had paid out $81.6 billion through the Canada Emergency Response Benefit, which provided $2,000 per month to those who lost their jobs as a result of COVID-19 lockdowns. Beyond the CERB, the federal government also moved forward with a number of other supports, including a new student benefit (estimated to cost $3 billion) and a series of measures aimed at “vulnerable Canadians” (at an estimated cost of $14.9 billion).
More analysis is needed to fully understand the distribution and impact of government spending last year, but the basic finding — that support exceeded income losses — has been put forward before.
Tammy Schirle, a professor of economics at Wilfrid Laurier University, notes that some of those in the bottom quintile would not have been making money before the pandemic began — and so wouldn’t have lost any income — but they still would have benefited from increases in the Canada Child Benefit and the GST credit, which could have helped with extra expenses.
“Generally, there was criticism at the time that some workers with the lowest earnings would have received more income than was lost,” Schirle said in an email this week, referring to the CERB.
“However, in the context that Canadians needed something rolled out quickly, and our current infrastructure for [employment insurance] would not suffice, this was an acceptable compromise in my view.”
In a global emergency, too much help is likely better than too little. But the federal government may have faced a choice between moving fast and moving with precision — between making sure that people who would need money got it quickly and making sure that people only got as much money as they absolutely needed.
Social policy in a hurry
“CERB payments were flat amounts because the government did not have the capacity [in information and technology] to income-test the benefit,” said Jennifer Robson, a professor of political management at Carleton who has been consulted by the government on EI reform (full disclosure: Robson is a friend).
“The choice was ‘automatic’ or ‘income-tested.’ But until and unless we build serious back-of-house capacity in our social programs, you can’t have both for a crisis of this scale.”
Robson also suggested that if the CERB did end up overcompensating people, the question could be flipped around to ask whether that proves too many people in this country were being paid unreasonably low wages in the first place.
The Liberal government has since transitioned away from the CERB and StatsCan’s estimates show that the disposable income increases dropped off significantly in the third quarter.
John Lester, a fellow at the University of Calgary’s school of public policy and a former analyst at the Department of Finance, argued in December that the government should have been quicker to deal with the issue of “overcompensation.”
The threat of inflation
In her fall economic statement, Freeland suggested that increased disposable income and savings could act as “preloaded stimulus” to spur economic growth once the Canadian economy reopens.
Mikal Skuterud, a professor of economics at the University of Waterloo, said the risk is that excessive stimulus could trigger inflation, though he argues that the actual severity of that risk is a “million-dollar question that nobody knows the answer to.”
For now, the political criticism is muted.
The Conservative Party has criticized the size of the deficit and Conservative Leader Erin O’Toole has noted that the Trudeau government spent more per capita than comparable countries. The Conservatives also have argued that the government should have moved faster to deliver a wage subsidy and have criticized the fact that some large, profitable companies were able to access the wage subsidy.
The Liberals can’t manage money. We can’t leave them in charge of our economic recovery. <a href=”https://t.co/33rnFA4fcu”>pic.twitter.com/33rnFA4fcu</a>
But they do not seem eager to make the case that Canadians got more money than they deserved or truly needed — presumably because they know how well that would go over with those Canadians who received federal support.
Ahead of a federal budget — and possibly a federal election — the larger question is how the spectre of a significant deficit will affect both fiscal policy and the political debate going forward.
Canadians might be thankful for all the support that the federal government has provided, but will they come out of this pandemic with new worries about government debt? And if so, are Conservatives interested in trying to connect with that anxiety to build support for a much more fiscally restrained approach?
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.
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.
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.
