Whoever wins the federal election embraces an economy that worries Canadians.
The support in the pandemic, intended to be short-lived, sprawled and spent well beyond expectations. On top of that, the federal Liberals believed it was not a matter of trying to pick up where we left off when the pandemic hit, but that it was time to carve out several ambitious tranches in the economy that will occupy spending envelopes for many years.
A couple of surprises came along for the long ride: a hot real estate market that made matters less affordable and a sudden and unwelcomed rise in the cost of living. The national debt is more than $1.1 trillion and growing by $424 million each day. The prospect of additional taxes to pay for the emergence of a national child care program, inevitable health care expenses and the transition to a greener economy will make life in Canada more costly. Even Justin Trudeau is counselling not to tax the rich to get things paid for, but what he won’t disclose is that clearly the more prosperous will be targeted more than those with fewer means.
It is clear from the survey released Tuesday by the Greater Vancouver Board of Trade (GVBOT) that this is a worrisome path for the region’s businesses and the general public alike. But the governing Liberals, who hold a small edge in the polls in the final week, are expressing utterly no worry about anything intersecting with the economy apart from their fear of losing power over it.
Justin Trudeau, no question, wants to be a crowd pleaser. After a hesitant start in the pandemic, he ladled on support in places that likely stunned even the recipients. He coupled that with new initiatives on climate change, racial reckoning, housing, infrastructure and innovation, among others, in packing what would typically be a decade of steady stewardship into a hyperactive year-plus.
The result, though, is hardly sustainable, in part because the ravages of the coronavirus stand to protract the pain and prevent the gain. With each variant comes a variety of economic and social impacts; few among us are in an improved emotional state, which has likely made us more malleable on the lavish spending and susceptible to an unconscious dependence on an expanded public sector.
Notwithstanding that fog, nearly nine in 10 businesses and eight in 10 in Greater Vancouver express concern about the rising tax burden. Businesses are equally divided – one part positive, one part negative, one part unsure – about the track taken for recovery. The general public is only slightly less negative.
Given the overwhelming measures to backstop and reassure Canadians, it is revealing that so few believe the path ahead will work and yield a living standard that is at least comparable to the subdued state we left in early 2020 as a mini-recession loomed.
Yet only one in 10 in Greater Vancouver residents and one in seven of its businesses believe their standards of living will increase over the next five years. So concerned are both businesses and the general public that one in three fear that the pandemic support will run out. The outlook is as if we were living in a stealth depression, but it is at times like these that all sorts of pet projects can roll out and roll on, and that has clearly been part of the Liberal calculus.
This data on a disturbed mindset ought to trouble the Liberals as indicative of frail Canadian confidence; instead, the election campaign has emboldened them to propose more than $78 billion beyond their extraordinary recent budget that committed to more than $100 billion.
The strange narrative in the GVBOT poll from the Mustel Group is that the very clear worry about the economic road is in contrast with an encouragement to blow the bank. The survey found that people want more to be spent on climate change and on housing affordability; it’s obvious the Liberals had the same findings some time ago to channel the spendthrift.
Want more? Sustainable resource development, trade-enabling infrastructure, public transit and tourism are in the wish-list for starters. The question becomes when and how it will slow and end and what it will need next to feed itself.
Indeed, GVBOT president Bridgitte Anderson refers to a “heightened level of anxiety” in the business community about its prospects. There seems little optimism in the central message that, even if it has anesthetized the public to the staggering numbers, the federal government has overdone it.
What is clear is that the focus to build back better ought to have focused on attracting and enabling an improvement in the labour market. Half of the businesses surveyed identified this as their top worry, with roughly three-quarters arguing for more efforts to bring people to Canada and to confer their homeland credentials more readily. This business fear is a major impediment to recovery because it consumes energy in recruiting instead of operating.
If this unease can be so palpable even in British Columbia, the country’s best performing economy, surely the party that forms the next government will need to heed the signals and repeal the magical thinking. Election campaigns are about losing your senses and assuming government is about restoring them, aren’t they?
Kirk LaPointe is publisher and editor-in-chief of Business in Vancouver and vice-president, editorial, of Glacier Media.