The Trudeau government’s 2020 fall economic statement is sweeping and ambitious in its rhetoric, but more modest when it comes to details.
The government promises universal national childcare and pharmacare programs, but only at some unspecified time in the future. The fall statement merely launches the beginnings of what promise to be protracted discussions with the provinces.
Canada will finally require the big, foreign-owned television streaming services, and other internet-based services such as Airbnb, to collect the HST. But when it comes to the giant web corporations paying income taxes in Canada, the government kicks that decision down the road.
We will have to wait for the 2021 budget to find out how the government plans to collect the more than $3 billion it anticipates getting from the internet behemoths, many of which have yet to pay a penny of tax in Canada.
The economic statement recognizes that the current steep economic downturn is a she-cession (using that word), which has particularly devastated employment in sectors, such as hospitality and retail, where women form the bulk of the workforce. But, again, it is vague and non-committal on programs and solutions for the millions of women who have lost their jobs and livelihoods.
Present-day challenges and the future
Overall, the economic statement is a hefty document, which focuses both on the current challenges of the pandemic’s second wave and on the government’s big plan to jump start the economy, post-pandemic.
Finance Minister Chrystia Freeland defends her government’s strategy of continuing to spend big to keep Canadians afloat during this deep, COVID-19-caused recession.
Her statement projects what looks like a huge deficit for 2020-21, of over $340 billion, ten times the 2019-20 deficit. But Freeland reassures us that we can handle that increased debt burden because of Canada’s strong fiscal position, and, more important, thanks to historically low interest rates.
In addition, Freeland assures Canadians that “the government’s fiscally expansive approach to fighting the COVID-19 pandemic need not and will not be infinite. It is limited and temporary.”
The COVID-19 recession is different from the 2008-09 downturn, the finance minister says, because its cause was an identifiable external shock. Now, with vaccines on the horizon, Freeland enthuses that we can see the light at the end of the tunnel.
To underscore that point the statement devotes a major section to the government’s work on vaccines and therapeutics.
There is a bar graph showing what a number of countries, including Canada, have done to procure vaccine doses, from a variety of sources. Canada is at the head of the pack in that race, with 11 confirmed doses per person. The countries next on the list, the U.K. and Australia, have only procured half as many.
The statement also announces hundreds of millions in new money to beef up Canada’s vaccine manufacturing capacity, including $126 million for a new National Research Council (NRC) centre in Montreal. But given that we know other countries will be ahead of us in the queue when it comes to actually getting vaccines, these measures look like a belated, rearguard action.
The 2020 economic statement devotes much space to the future — post-pandemic — when the economy will need a strong stimulus boost. A good part of that boost will consist of investments of $100 billion over three years in clean energy, infrastructure, public transit and workforce training.
The government says this stimulus will include targeted measures for Black Canadians, Indigenous communities, and youth — all of whom have been disproportionately hit by the pandemic. But, again, there is little detail on any of that.
There is, also, immediate money for infrastructure in First Nations communities, most especially a serious investment in clean water facilities.
The government is behind in its promise to eliminate boil-water advisories on reserves, but the commitment in the 2020 statement does look serious. NDP Leader Jagmeet Singh found much fault in the statement, but did give the government credit on that score. Singh criticized the government for failing to provide targeted investments in housing for Indigenous communities. He characterized crowded substandard housing as the biggest barrier to social progress for Indigenous people.
There are some specific, targeted new spending measures in the fall statement, such as $181.5 million for the arts, especially the performing arts, which have been crushed by the pandemic, and $50 million for film and television production, which has had to radically curtail its activities.
The government will also provide a new program of temporary support of up to $1200, at a cost of $2.4 billion, to families with children up to the age of six. This money will be in addition to the Canada Child Benefit. The government will pay the full amount to qualifying families with a net income under $120,000 per year. Higher income families will still get the new benefit, but only half the amount.
One reason the government is providing this new money for families with young children is that it realizes it has been slow off the mark when it comes to childcare.
Freeland quoted the 1970 report of the Royal Commission on the Status of Women, which recommended a universal childcare plan, half a century ago, and she admitted that 50 years has been too long a wait.
There was an impression of urgency in the minister’s rhetoric, but the only tangible childcare measure in the economic statement is a pledge of a paltry $20 million over five years for a federal secretariat on early learning and child care. As the document explains it, this body “will build capacity within the government and engage stakeholders to provide child care policy analysis in support of a Canada wide-system.”
That prime example of government-talk and ten cents won’t get anyone a single, affordable childcare space, hence the extra (up to) $1200 per family with young children.
The pandemic has revealed the fatal flaws of Canada’s patchwork long-term care system, and, there, the federal government has clearly felt the urgency to act. In the economic statement it announces a $1-billion “safe long-term care fund,” “to help provinces and territories protect people in long-term care and support infection prevention and control.”
This is not no-strings-attached money for the provinces. To get it they will each have to provide “a detailed spending plan” and demonstrate “that investments have been made according to those spending plans.”
This might be a first step toward bringing long-term care fully under the universal health care umbrella, and applying to it the same rigorous principles we have in the Canada Health Act.
The provinces can hardly complain about federal interference in their jurisdiction when it comes to long-term care, since they have so demonstrably failed to keep their senior citizens safe during the pandemic.
Bloc Québécois Leader Yves-François Blanchet did, nonetheless, take exception to this federal meddling in provincial affairs. He advised the Trudeau government that its money would be better spent on increases to the Canada Health Transfer, the federal contribution for universal health care. Some provincial premiers, notably Ontario’s Doug Ford, have already taken up that refrain.
So far no opposition party plans to vote for the statement
Those exchanges on long-term care, and the federal government’s baby steps toward new, universal, national programs for prescription drugs and childcare, demonstrate how nothing can happen in this decentralized federation without close federal-provincial collaboration.
The Conservatives are less concerned about the feds bigfooting the provinces than they are with the massive increases in public indebtedness. The last Conservative government of Stephen Harper spent big, and allowed the deficit to grow, in response to the 2008-09 recession — although it resisted at first, and tried to claim it could still run a surplus.
The current Conservatives have not said that they would not do what the government is doing. They supported the CERB and other emergency support measures, for instance.
One gets the impression, however, that Conservatives believe fulminating about the government’s credit card bill is good politics, if not sound or coherent policy.
The NDP also worries about the deficit, but not because the government’s spending plans are too ambitious. Singh wants more ambitious plans in such areas as childcare.
The NDP’s concerns are with the lack of measures to find new sources of revenue.
New Democrats advocate a wealth tax and new measures to tax those who have profiteered on the pandemic. A recent study by Canadians for Tax Fairness shows that the wealth of Canada’s top billionaires grew by $53 billion during the pandemic.
New Democrats are disappointed there is nothing in the economic statement to make the rich pay their fair share, and equally unhappy that the government continues to stall on taxing the biggest players in the online world, such as Google and Amazon.
When you take those lacunae together with what Singh calls a weak plan on climate change, projected new stimulus spending that relies too much on the government’s Infrastructure Bank, where public decisions are leveraged by private interests, and the slow pace of progress on childcare and pharmacare, you get a recipe for New Democrats not voting for this economic statement.
If the other parties, as they have hinted, also vote against it, the government will fall. A fiscal update, like a budget, is, perforce, a confidence measure. And so, if this measure loses in the House, we will have a pandemic election.
Jagmeet Singh did leave the door open, and more than a crack, to finding a way for his party to continue propping up the government. He pointed out that the Liberals have adopted many of New Democrats’ suggestions over the past year in order to keep their support — the extension of the CERB being one notable example.
Singh told reporters we now enter a period of talks among and between the parties, especially the Liberals and New Democrats, aimed at finding some common ground. He did not say what, if anything, New Democrats need in order to give thumbs-up to the 2020 economic statement. But the NDP leader promised to keep the media, and Canadians, in the loop, in the days and perhaps weeks to come.
Karl Nerenberg has been a journalist and filmmaker for more than 25 years. He is rabble’s politics reporter.
Image: Chrystia Freeland/Twitter