See if you can make sense of this. The federal budget, released on Monday, forecasts economic growth for the year ahead at a stunning 5.8 per cent.
This is an almost unheard-of number, exceeded only once in the past 50 years. The forecast for 2022 is a very strong four per cent, likewise as rare as hens’ teeth.
So the budget is balanced, right? I mean revenues are pouring in, the economy has recovered and appears headed for historic levels of wealth creation.
But no, the budget is not balanced. Finance Minister Chrystia Freeland is projecting a deficit of $121 billion, in itself a staggering sum, but rendered incomprehensible by Freeland’s own forecasts.
Worse still, the red ink continues in bucketfuls as far as the eye can see. And Freeland is promising even more if the need arises — such as a fall election.
The explanation, she says, is that this budget is all about the pandemic. No, it most certainly is not. It’s all about pandering.
Every conceivable demographic group (men excepted) gets money poured on their heads.
Every known interest group is inundated with cash. I dunno if there’s a rhubarb growers’ commune in Pouce Coupe, but if there is, a cheque is in the mail.
Thus there is $30 billion for a national child-care program (assuming, improbably, that the provinces will buy in).
The Employment Insurance sickness benefit is extended from 15 to 26 weeks. What this has to do with COVID-19, I have no idea.
A new federal minimum wage of $15. A universal pharmacare program is once again promised.
Old Age Security payments for people 75 and older are hiked by up to $766 a year. Women and minority entrepreneurs get $300 million. Interest-free loans up to $40,000 will be available for environmentally beneficial home retrofit projects. There is a commitment of $18 billion for Indigenous communities, $12 billion to extend wage and rent subsidies for employers, and $20 billion for workers.
I could go on, but you get the picture. In an excellent commentary on these pages last week, Gwyn Morgan, a retired business leader, made the following points:
• As a percentage of GDP, Canada’s COVID spending is more than twice as high as all but two of the G20 countries.
• Meanwhile, since the Liberals were elected, capital formation has fallen to the third-worst level among the 37 OECD nations, ahead of only Brazil and Mexico.
It appears the business community knows something that Freeland does not. If something cannot continue, it will not.
And what cannot continue here is massive deficit spending with no end in sight. The minister is not, as she claims, bolstering Canada’s economy.
What she is doing is driving away private investment, while attempting to replace it with government largesse.
Earlier in her career, Freeland penned a book titled Sale of the Century. That’s what her budget represents. The sale of our country in the hope of re-election.
