The federal government has provided Canadians with its pandemic fiscal snapshot; now it needs to deliver a road map out of the country’s deep and debilitating debt valley.
B.C.’s NDP government also needs to begin providing more than details of how deep into that valley the province’s economy has descended.
A fiscal snapshot provides an overview of where we are, but the road map to recovery is where details are needed now because it promises to be a long and tortuous journey out of the dark for most Canadian businesses, and thus far clear directions of which road to take to start that journey have not been forthcoming from any level of government.
That is understandable. Pandemics are not an annual event. The federal government acted swiftly to stop the economic bleeding when Canada was hit by the initial COVID-19 wave.
Finance Minister Bill Morneau’s July 8 fiscal snapshot applied some numbers to the cost thus far.
They are dire by any measure: a $343 billion deficit, federal debt exceeding $1 trillion, 2020-21 expenditures up 63% to $612 billion, government revenue forecast to plunge 21% to $269 billion and a predicted contraction of the country’s economy of anywhere between 6.8% and 7.2%. There are also deep losses in store for pension plan investments that will erode retirement income options all over the map.
In B.C., a projected $227 million surplus is now a $12.5 billion deficit.
This, too, is just the first year of pandemic economics, and even though some businesses in B.C. and elsewhere across the country are starting to turn lights back on, many will need government assistance to survive over the next fiscal year.
Canada’s relatively buoyant financial situation has helped the country weather the storm thus far, but the leadership that has kept the ship afloat needs to plot a course forward that does not include a debt payload too heavy for Canada to carry into the future.