Home Business & Economy Economy Mid-pandemic federal fiscal snapshot coming July 8

Mid-pandemic federal fiscal snapshot coming July 8

All eyes on Ottawa to set the COVID-19 economic pace into fall-winter 2020-2021

Sunday July 5, 2020 ~ NATIONAL

Analysis by Mary P Brooke, editor ~ West Shore Voice News

Where Canada heads fiscally in this second half of 2020 will be set in motion this coming Wednesday July 8 when Finance Minister Bill Morneau provides what is being called a fiscal ‘snapshot’.

Different from a full budget or even a fiscal update, this document and presentation is being presented as only what it probably can only be … a brave and fair-minded guesstimate of where Canada can be heading after about four months of urgent infusions into virtually all levels of the Canadian economy.

The federal Liberal government under Prime Minister Justin Trudeau’s leadership found itself urgently propping up the needs of many sectors of society and economy that sprung up one after the other in rapid-fire succession (or all at once) as the COVID-19 pandemic forced people into retreat from normal interaction in society, the federal government.

Trudeau had many shepherds. The process of herding funds and programs to areas of need was informed by public health but prodded more so by various levels of provincial and municipal governments who were more on the front lines of societal delivery as well as agencies that were already doing the work of societal rescue (such as food banks, homeless shelters, women’s violence response groups, and seniors support groups).

Responding in real-time to the the sheer magnitude of the economic challenge that impacted every Canadian individual, household, business and organization in some way or another was a feat in itself for Trudeau and his leadership team to contend with.

Impact of the Opposition parties:

The federal NDP in Opposition in the minority government can be given much credit for coming ready to the table with expectations on behalf of most Canadians that the Liberals could catch, absorb and spit back out as emergency support programs such as the popular Canada Emergency Response Benefit (CERB). That program has quickly become a successfully tested baseline for an assured basic income for Canadians who are in economic crisis or transition.

It was NDP pressure that pushed CERB up to $2,000 every four weeks, made sure the criteria were opened up to many more economic sectors (including self-employed and the gig economy), and later than pushed for another 8-week extension of the program. Parliamentary process worked in the favour of Canadians. We were fortunate to have a minority government setup (ushered in not too far ahead of the pandemic in October 2019) that worked brilliantly to guide the ship with two rudders — NDP and to some extent Greens on one side and Conservatives and to some extent the Bloc on the other.

However, as politics tends to be, the Liberals ended up “eating the NDP’s lunch” as Huffington Post writer Althea Raj put it this week on CBC’s At Issue. That is indeed another example of how the Liberals maintain their central power in the political spectrum, by accepting ideas and pandering to the various pressures around them but maintaining the hand of power upon the process.

Finding stability in tumultuous times:

The fiscal framework that Morneau lays out on July 8 will tee up at least the aspirations of a Canadian economy that is scrambling to find its sea legs again after four months of COVID-19 response. Where the Liberals expect the economy to head for the rest of the year is the mission. What gets delivered will be given much scrutiny — not just by the Opposition parties but by every Canadian in their assessment of how well they expect to fare in this next phase of the emerging ‘new normal’.

Over $260 billion has been spent in the last four months to keep Canadians afloat, and the deficit (and future debt load) is significant. In any normal time that magnitude of expenditure in such a short unplanned time frame would have been unthinkable. That most of us survived the onslaught of COVID-19 economic impacts in some manner or another is a testament to the combination of will, insight, ingenuity, adaptability and tenacity that everyone on the Canadian team has exhibited since the pandemic hit full force in mid-March of this year.

The biggest unknown is how an expected ‘second wave’ resurgence of the COVID-19 virus in the fall of 2020 and winter months into 2021 will be handled by people, businesses and social systems including schools. How people decide to swirl in the marketplace, so to speak, will be the biggest influencer of success going forward.

Small steps or big adjustments?:

The Conservatives and NDP made it clear this weekend that they want more than just numbers, but with that an itemization of additions, changes and expansions to federal COVID-19 support programs along with more accountability and transparency.

No surprise, the Conservatives are calling on the Liberals to show how they will get government spending under control, while the NDP as the conscience of the nation at this point is against any premature efforts to reduce or withdraw any federal assistance.

A range of programs potentially lie in the firing line of the July 8 snapshot including CERB which helped individuals and small businesses as well as students to bridge the gap of non-employment or working from home, CEBA which has helped small to mid-size business with longer-term attention to operating stability, and the CEWS which provides up to 75% wage support to employees through their employers. Commercial rent assistance was brought into the mix (and provincially also residential rent in BC).

Conservative finance critic Pierre Poilievre today challenged how the Liberals have handled the economy. The small business critic for the Conservatives, James Cumming, highlighted the importance of accurate fiscal projections and planning from the government for Canadian business. Asking for certainty in a time of unprecedented uncertainty is not likely to find success.

===== RELATED:

CERB gets extended thanks to NDP pressure in minority scenario (June 15, 2020)

NDP scores big-time for everyday Canadians in pandemic minority government (May 28, 2020)

NDP Leader presses for student inclusion in job support during COVID-19 (April 20, 2020)