Bill Morneau muttered it best himself on Wednesday as he tabled documents showing the biggest deficit Canada has ever seen, clocking in at $343 billion and counting.
“What choice did I have?” the finance minister told a reporter in French when asked about how he felt about the dubious distinction of having his name attached to that number.
There’s no doubt the deficit total is mind-blowing — surging past every private-sector estimate and pushing the projected federal debt past $1 trillion.
The spending alone is simply unheard of: $403.4 billion in direct support, fee deferrals and lending measures over the course of just a few months.
There’s no question that if the federal government had not stepped up, we would have been in a far worse place. Federal analyses in Wednesday’s documents, as well as independent number-crunching by Scotiabank, have shown that the contraction of the Canadian economy would have been far starker, and unemployment much uglier, if the support for failing businesses and unemployed people and vulnerable populations had not been there.
But despite his fatalist answer, Morneau did have choices to make along the way. It wasn’t all or nothing. And he will have many more vital choices to make in the next few weeks that could make or break the Canadian economy and its workforce for years to come.
Of course, as Morneau suggests, the federal government needed to act in a big way to rescue the collapsing economy. But we also need to figure out: is all this spending worth it, and how do we as a country make sure we make the most of it as we hope to turn the corner on the pandemic economy?
Those answers were absent from Wednesday’s reckoning of COVID-19 spending.
Canada, led by the federal government, has said yes to every major type of support imaginable. In the fiscal documents, there’s a table (page 34, figure 1.5) that compares Canada’s COVID-19 programs to other developed countries.
And Ottawa, unlike other governments, proudly checks off every single category for offering help: buying personal protective equipment, enhancing employment benefits, wage subsidies, help for seniors, help for students, help for the vulnerable, rent support, business loans, business credit.
You name it, we did it. And for the most part, Canadians supported those choices. Even the opposition Conservatives have avoided criticizing the magnitude of the federal help, preferring to pick away at the Liberals’ pre-COVID fiscal policy and COVID program design instead.
If there’s criticism, the push is almost always for more spending or different spending, not less spending.
So now that the federal government has thrown everything it has at the pandemic and managed to cushion the blow, Ottawa needs to take a hard look at the programs on offer, determine what’s effective, find the holes and fix them.
With astute choices, the federal government could lead us to a more-selective but still-supportive fiscal policy that can ease the pain, but also set us on the right footing for a robust recovery.
“Canadians need a full and transparent assessment of all pandemic-related support measures/programs and the accompanying public expenditures so it can be determined what worked, what didn’t and what needs to be adjusted as we move to the next phase of the economic recovery,” say the Chartered Professional Accountants of Canada.
That exercise has begun on the two key pillars of the federal support package — the emergency response benefit and the wage subsidy.
The Canada Emergency Response Benefit, which has paid out $54 billion so far to individuals who found themselves out of work because of the pandemic, will come to an end over the coming weeks.
Those still unemployed will have to turn to the employment insurance system for support, but the pandemic has proven in vivid colour that EI leaves many, many people to fall through the cracks. A redesign is in order.
The wage subsidy is now the support structure of choice for the federal government, with Morneau hoping to revamp it so that employers and employees alike have incentives to get back to work, even at a reduced pace.
With $82 billion and the fortunes of many businesses on the line, it had better work wonders.
But in all the billions spent on companies and their workers, there are major, essential building blocks of the economy that have been forgotten.
Any working family will tell you that safe and accessible child care and public transit are prerequisites for going back to work, and yet they are way down on the to-do list for federal and provincial governments, caught up in the funding-and-power struggle that seems to define our confederation.
There’s a cascading effect. It would be harsh to phase out the CERB while so many parents can’t return to work, and it would be inefficient to ramp up the wage subsidy if a solid chunk of the workforce is stuck at home waiting for the bus or for a safe place for their children.
Wednesday’s fiscal reckoning was a welcome, transparent start to our collective grappling with the fallout of the economic collapse. But it’s time to take that 168-page bundle of numbers that has helped us tread water and put it to use for the future.
Heather Scoffield is a columnist with Torstar Syndication Services.