Roundup: Pearl-clutching about the deficit

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For the first time this week, prime minister Justin Trudeau held a presser, wherein he praised the agreement with the First Nations on moving ahead with transferring control over child welfare, mentioned the virtual Cabinet retreat that was held over the previous two days, and mentioned that new pandemic modelling was on the way, noting that there are still hot-spots around the country. And then it was the takeaway message of the day – a mere couple of hours away from the fiscal “snapshot” being delivered, Trudeau made the case that they chose to support Canadians rather than leaving them to fend for themselves, and that the cost of doing nothing would have been far greater on both healthcare and the economy. He reiterated that this was not the time for austerity, but that they have been building a “bridges” to a stronger, more resilient Canada, and drove home the point that the federal government took on debt so that ordinary Canadians wouldn’t have to. He pointed to the low debt-to-GDP ratio, and that historically low interest rates mean manageable borrowing costs. And with one final word on Bob Rae being appointed to the UN, he took questions, one of the first of which determined that he didn’t recuse himself when the WE Charity sole-source contract came before Cabinet, which is something the Ethics Commissioner is looking at. He spoke about the necessity of childcare, that Bill Blair has been engaged on the subject or the RCMP and police brutality as part of the broader Cabinet workplan on combatting systemic racism, that they were following the recommendations of the Auditor General on CBSA, and then reiterated again that with historically low debt-servicing costs, it was easier for the federal government to take it on in order to prevent Canadian households from having to do so. When asked about the relationship with Donald Trump, Trudeau once again reiterated that they have concerns about the possibility of new tariffs, and that it will only hurt American industry because they need Canadian aluminium as they can’t produce enough of their own.

And then the fiscal “snapshot.” While Bill Morneau’s pabulum-heavy speech was pretty much all self-congratulation and a recap of measures they’ve taken, the accompanying documents did show a $343 billion deficit projected for this year (though it has been speculated that this was an outer bound limit designed for them to come under), and that the total debt by the end of this fiscal year could be $1.2 trillion – numbers everyone clutched their pearls about while ignoring that the debt-servicing costs continue to decrease even though the size of the debt has increased. There was mention that the wage subsidy is going to be extended, but with modifications on the way “sooner than later,” but there wasn’t much indication about the broader recovery plan thus far.

Of course, the obsessions among all of the media coverage was the deficit and debt figures, because our reporting narratives remain firmly affixed in the mid-1990s, and no one can break free of them – not to mention the hyperbolic mentions about how this was the biggest deficit since the Second World War (never mind that this is a virtually unprecedented global pandemic we’re facing with a demand-side shock that people can’t seem to wrap their heads around). And because the framing devices remain in the 1990s, headlines obsessed that there wasn’t a plan to curb spending – because of course we know how the epidemiology of this pandemic is going to play out until we get a vaccine at some point in the future. But perspective? You need to turn to the economists on Twitter for that.

https://twitter.com/kevinmilligan/status/1280933038394875905

https://twitter.com/LindsayTedds/status/1280946657106878464

https://twitter.com/LindsayTedds/status/1280948115911045120

https://twitter.com/LindsayTedds/status/1280935717359644672

https://twitter.com/LindsayTedds/status/1280992891343527936

Good reads:

  • The Auditor General released her spring report, touching on CBSA deportations, student loan repayments, military procurement, and the National Gallery.
  • The website for the student volunteer grant programme is advertising hundreds of positions that don’t exist, because WE was going to create them for places to host.
  • Survey data on diversity in the PMO wouldn’t disaggregate Black from other visible minorities, unlike the rest of parliamentary staff surveyed.
  • Andrew Scheer got huffy when pressed by reporters on his lack of a mask in the Toronto airport in spite of clearly posted mandatory requirements to wear it.
  • Peter MacKay is getting heat for not participating in a couple of virtual debates organized by grassroots riding associations.
  • Mike Moffatt explains why the PBO’s report on “Basic Income” was problematic and why it makes the most vulnerable even worse off than they are now.
  • Heather Scoffield walks through the statistic that government’s debt-servicing charges are dropping, in spite of higher levels of deficit and debt.
  • Scoffield also evaluates Bill Morneau’s claim that the spending prevented a complete economic collapse.
  • Kevin Carmichael delves deeper into the issues related to the deficit and debt, and the need for a new fiscal anchor that the government can point toward.
  • Colby Cosh crunches some restaurant data to see how the economic reopening is going for the industry.

Odds and ends:

My latest for the CBA’s National Magazine looks at how the Ontario government may have shielded itself from pandemic-related lawsuits.

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5 thoughts on “Roundup: Pearl-clutching about the deficit”

  1. I have noticed lately that you have a strong distaste for our Finance Minister which means to me that I will always take your comments regarding the Finance Minster’s actions with the idea that maybe I should get another view from another source. . As for your words ” self congratulatory” I would say with every form of media constantly tearing apart everything the Liberals do they, the Liberals, have to toot their own horn a bit. They have made some missteps but not as many portrayed by a lot of the talking heads in MSM.

  2. Prior to the pandemic pundits were saying that in general Canadians were a paycheck away from disaster, they had too much credit card debt and were overextended on consumer loans like those on autos. If one believes this, and there are many indications of truth, more Canadians are likely to praise Trudeau’s programs than not. I wonder how much more debt Canadians have racked up though and how deeply they have reached into their savings?

  3. I’m actually proud of Trudeau being out in the open and saying, yeah, so what, I’ve been a youth advocate for years, I sat at the table while cabinet was discussing a program to help students help their communities, and if that’s a crime so sue me. It was very Pierre of him, very “just watch me,” and you could really see his father in him when he looked directly at the camera, shrugged, and smiled. The last time he got a rap on the knuckles, the “verdict” was torn apart by a number of legal experts, so the EC’s draconian judgment is not necessarily divine writ of gospel the way the media bubble makes it out to be.

    And actual polling data from 2019 in the wake of the Multi-Hyphenate Affair proved that there were more important issues that voters cared about that affect their everyday lives a lot more than the soap opera intrigue of “backroom deals” or whatever. At the time it was climate change, healthcare, and the cost of living. This time around it’s Covid and, as James Carville says, the economy, stupid. But deficits only matter when it’s a Liberal/Democrat in charge.

    The way I see it, the more the Conservatives and their lapdogs in the NDP cry wolf, with these asinine “scandals” that have next to no impact outside the Ottawa pundit bubble and Trudeau-derangement Internet comment boards the likes of which the would-be Oswald of Rideau Hall probably frequented, the more they cook their own Canadian goose. Just like the Republicans chasing after both Clintons’ (prospective) impeachments and the Democrats chasing after Trump’s. “Crooked Justin, Crooked Justin, lock him up.”

    Before he sharted the bed on Covid, Trump stood a reasonable chance of being reelected, and Democrats stood accused of wasting taxpayer dollars on an investigation that led nowhere. But Trudeau has done very well on Covid. So the DipperCon horseshoe-populist coalition has no recourse but wasting taxpayer dollars on investigations that lead nowhere.

    I’m sick of this, they have nothing to offer besides smear campaigns and unnecessary flak because they crave the spotlight and are jealous of Trudeau’s newfound popularity. It’s going to backfire on them again, but in the meanwhile, Canadians lose out. 35,000 students, plus the communities they could have helped. Get some friggin’ policies and call off the attack dogs or GTFO.

    • Aaaaaaaaaand Jesse’s Brownshirts are coming after Maggie now. I knew it. I knew they weren’t going to let go of this bone until they’d dragged the entire family in and savaged them to pieces. Just. Like. Hillary. Clinton.

      It still doesn’t change the fact that this is a bogus hit-piece campaign from petty, jealous tall-poppy hacks looking to score points out of jealousy by drumming up “controversy” for clicks and political points. Is the PR good? No. Might this be cataclysmic in a way that SNC wasn’t? Maybe, who knows. Predictions are hard, especially about the future. Really if anyone should wear the blame for this it’s whoever’s giving him poor advice. Not Trudeau. I have no reason to believe his intentions were nefarious. I’m still proud of him for saying, come at me bro. So they did, and revealed themselves to be the lowest form of scum: unleashing a swarm of hatred aimed at an elderly woman with mental health issues. Absolute filth.

      But honestly, after this latest episode and seeing just how dirty Jesse Brownshirt really is, the Chapo Trap House version of Ezra Levant, if I were him I’d call their bluff and quit anyway. Let Chrystia take the reins and fend off the flak. Why should he have to tolerate all this unnecessary venom and now see his poor mom raked over the coals? His little brother? I’m furious and outraged by what is happening right now. Shame on all of them. You won’t know what you got until it’s gone.

      He’ll be much happier building habitats for humanity outside the nation’s capital instead of being vilified for emails and Billy Beer.

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