Happy days are right around the COVID corner
Feds counting on robust post-pandemic economy to boost government revenues
Happy days aren’t here again, but as the federal Liberals tell it, they’re right around the COVID corner.
The federal budget isn’t all about winning the fight against COVID-19 and healing the economic wounds left by the pandemic, but the government’s long-term plans are predicated on getting that done.
As advertised, one of the budget’s centrepieces – if ever a budget had more than one “centrepiece,” this is it — is a $100 billion recovery package to be spent over the next three years, first to “punch our way out of the COVID recession,” and then goose the economy so it comes “roaring back” when it fully reopens.
Once we’ve conquered COVID-19, salvaged businesses devastated by the pandemic and recovered as many lost jobs as we can, the Liberal government will lead us to the promised land. Or as Finance Minister Chrystia Freeland put it:
“The final challenge is to build a more resilient Canada; better, more fair, more prosperous, and more innovative. That means investing in
Canada's green transition and the green jobs that go with it …”
Coming out of the pandemic recession, the minority Liberal government isn’t about to raise taxes on anyone except those Canadians that can most afford to pay, and even there the taxman’s bite is reserved for folks who buy private planes, luxury cars and expensive boats.
The feds are counting on a robust post-pandemic economy to boost government revenues and, over the next half-dozen years, bring the deficit down to $30 billion. Last year’s deficit was a record $354 billion and this year they’re projecting a $157-billion shortfall.
But the budget isn’t about the fiscal health of the nation. It’s about getting, and keeping, Canadians well — physically, mentally and economically — and setting in motion the longer-term plan: Freeland’s “final challenge.” For the federal Liberals that means investing in Canada's green transition and the green jobs that go with it, spending to promote Canada's “digital transformation” and innovation, and building infrastructure.
Infrastructure, by the way, is no longer limited to stuff like roads, bridges, and the like but, as Freeland put it, includes “social infrastructure – from early learning and childcare, to student grants to income top-ups – so the middle class can flourish and more Canadians can join it.”
Freeland noted that she was just two-years-old when a national childcare program was first proposed.
She acknowledged that the half-century struggle to implement it is “testament to the difficulty and complexity of the task.”
“But this time,” she pledged, “we’re going to do it.”
The promise of a national childcare program — another centrepiece of the budget — depends on provincial-federal co-operation, the primary source of the difficulty and complexity to which Freeland referred.
It remains to be seen whether $30 billion over five years, plus a promise of $8.3 billion in annual federal contributions after that, will be enough to break the provincial-federal logjam that’s stalled national childcare for 50 years.
Regardless, childcare is a tasty treat for the Liberals to put in the window when they go to polls to ask Canadians for a majority government. That will almost certainly come before the year is out, provided it’s safe and the vaccine rollout stays on the tracks.
AFFORDABLE CHILDCARE
The Liberals claim their plan will cut childcare costs by half next year and should reduce the price to just $10 a day by 2026.
While the big payoff is five years out, families with young children will take the 50 per cent reduction next year in a heartbeat.
And if the promise of affordable childcare doesn’t hook critical millennial voters, the Liberals’ plans for the environment — yet another “centrepiece” — just might.
Freeland said job growth means green growth in 2021, and the budget sets out a plan to cut greenhouse gas emissions by 36 per cent by 2030 and to net-zero by 2050.
She reaffirmed Prime Minister Trudeau’s pledge to protect 25 per cent of Canada’s land and marine areas by 2025. Atlantic fishers will be more than interested bystanders when the feds stake out that 25 per cent of Canada’s marine areas for conservation.
The Liberals’ longer-term ambitions are entirely dependent on, as they said, conquering COVID and helping Canadians come out the other side with an economy worthy of the name.
The timing of the next federal election is entirely dependent on the former. The outcome might hang on the latter.