Crisis cash for those who don’t need it

If Justin Trudeau isn’t more careful, the money he’s spending to keep the Canadian economy afloat today could sink it tomorrow.

For weeks, the prime minister has been on a necessary but increasingly worrisome spending spree to carry the country though the COVID-19 crisis.

Virtually every need and group seems to have been considered as Trudeau lived up to his often-repeated promise to have everyone’s back. For the most part, Canada’s been better for it. Trudeau’s emergency aid has shepherd individuals, families, businesses and the country itself though a pandemic that threatens our future economic health as well as our physical well-being.

But last week, Liberal largesse veered off into cloudcuckoo-land when Trudeau’s itchy fingers started handing money to people who clearly didn’t need it.

As a result, every one of the 7 million Canadian seniors who receives Old Age Security will be handed a tax-free cheque for $300 — regardless of their financial situation.

On top of that, 2 million of these seniors who get the Guaranteed Income Supplement will be given an additional 200 tax-free dollars.

The supposed reason for this flurry of new spending is that the pandemic has made life more costly for seniors, hitting them with extra expenses for things like grocery deliveries or prescription drugs. That’s true, but it’s also the case for a lot of younger Canadians who are also paying more to get through the pandemic but who won’t see a dime from Ottawa. It didn’t have to happen this way.

There is indeed a case to be made for helping seniors in dire financial straits. Yet it would have made more sense, both from public policy and fiscal perspectives, for Ottawa to direct its money to seniors who are truly struggling to cover their bills. Those people would have been easy to identify because they’re the 2 million seniors with incomes low enough to already qualify them for the Guaranteed Income Supplement.

As it stands, Trudeau’s seniors’ payout will cost a total of $2.5 billion, and arguably go to millions of people who could get by without it. Had he directed all that money to the more deserving, low-income seniors, they could have each received about $1,200, instead of the $500 they’ll be getting. Conversely, had Ottawa limited the $500 cheque to the 2 million low-income seniors, the program would have cost less than half of what it will now.

After all the shock waves COVID-19 has sent through this country, many Canadians will simply shrug at these numbers. What’s another $2.5 billion in these crazy days?

But here’s the rub. As of Friday, federal COVID-19 relief spending had topped $151 billion. The most optimistic prediction hitherto delivered by the Parliamentary Budget Officer was that this year’s federal deficit was headed to a record high of $252 billion — about 18 times what it was in 2018-19.

And that forecast came before Trudeau extended the Federal Emergency Wage Subsidy for another three months. It’s also certain that even when the worst of this pandemic is over — whenever that happy day comes — the federal government will be shovelling out billions of even more dollars to revive an economy now on life-support.

Canadians may have lost their aversion to high deficits and debt. But debts have to be repaid, at least in part, and our national debt is creeping up toward being half of the country’s gross domestic product.

Someday, the bill collector will come calling and we’ll have to be ready to answer the door with more than an empty hand.

Trudeau must remember this.