Roundup: The greater danger of spending too little

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Chrystia Freeland unveiled her first economic update yesterday, and much of it was predictable, from the size of the deficit (which every single news source focused on immediately, as though it were still 1995), to the lack of a fiscal anchor while we remain in the pandemic, to the promises for how to build back in a more inclusive and greener manner. One of Freeland’s major points was that there is a greater danger in not spending enough than there is in spending too much – particularly at a time of record low interest rates – and we saw this borne out in the last recession, where the Harper government withdrew stimulus too soon, and the Bank of Canada was forced to keep rates lower for longer and we had a consumer debt crisis as a result. There were “down payments” for the work of getting to national childcare, long-term care and the meeting climate targets, but those are also all areas where they need provincial buy-in, so that’s going to get interesting very fast, especially given the number of hostile premiers that are currently in office. There were also new programmes rolled out for tourism and live events, and plans to extend GST/HST to web giants.

Predictably, the opposition parties were unimpressed. Erin O’Toole spent his response speech lying about what has been done to date, set up a completely false revisionist history of the pandemic, and went on TV to moan that the government “overspent” on CERB – apparently not grasping that the point was to keep people at home so as not to spread the virus (ergo, the Conservative plan is apparently to force people back to work in unsafe conditions so that they can facilitate the spread of said virus). The NDP were also predictable in their demands for wealth and “excess profit” taxes, never mind that they are inchoate concepts that largely don’t work out in practice. This means that we get to go through yet another round of election speculation as people wonder if the opposition will gang up to bring the government down over the inevitable implementing legislation.

Meanwhile, Heather Scoffield remarks on the ambition in the fiscal update, and whether or not the government will have the ability to deliver on any of it. Kevin Carmichael bemoans the lack of a fiscal anchor, but does admit that Freeland is right in that there is a danger of spending too little, or withdrawing stimulus too early (like Stephen Harper did). Paul Wells is disquieted by the lack of details on big items in the update, as well as this government’s propensity to farm out tough decisions to people not in government – which is a problem.

https://twitter.com/LindsayTedds/status/1333534144752537600

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Good reads:

  • The PM will be meeting with premiers on December 10th in order to talk about their demands for increased healthcare transfers.
  • In pandemic news, Alberta’s hospitals are not only at capacity, but now they are starting to have to ration oxygen to patients.
  • The government is once again delaying gun-marking regulations at a time when gun control advocates are calling for even stricter measures.
  • The government hasn’t been able to provide the trade committee with a copy of the new UK trade deal, because they haven’t finalised the text yet.
  • In Alberta, Ecojustice was denied an injunction against the Committee for UnAlbertan Activities – err, “anti-oil inquiry” and its actions.
  • Kady O’Malley’s Process Nerd column previews the Bloc’s Supply Day motion on increasing health transfers to the provinces ahead of the First Ministers’ meeting.

Odds and ends:

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2 thoughts on “Roundup: The greater danger of spending too little”

  2. Go ahead and push an election. The obstructionist opposition would deservedly be sent packing to the nosebleed section of the HoC where they belong.

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