The 2021-22 federal budget that was handed down last week was, as expected, loaded with spending related to the COVID-19 pandemic.
And so it’s going to carry a large financial burden that will affect this country’s finances for years to come.
The budget has a deficit of $154.7 billion, down from the $354.2 billion that is forecasted for the 2020-21 fiscal year, but still far too high for a nation of under 38 million people.
The days of balanced budgets in Canada are a distant memory.
No government is going to try to work its way towards balance in the midst of a global pandemic and a massive economic recession. During times like this, they need to show support for those who lost their job for reasons that have nothing to do with performance or ability, and they need to shell out money for businesses, money for programs to stimulate the economy and money for the health care system that is fighting the pandemic.
Granted, a lot of programs that the government introduced last year, and are continuing this year, were rushed and resulted in money going to people who didn’t need it, but there’s a lot of people who needed that assistance.
We’re going to be facing the repercussions of the COVID-19 pandemic and the government’s spending for many years to come. There’s no easy way for this country to emerge from a $154.7 billion deficit.
Some of the government programs will expire in the coming months, which will slash expenses, and other programs do have a payback requirement, which will help with revenues.
But other pandemic-related expenses are not light switch spending; you can’t just turn them off at some point this year.
One of the great challenges that this government is going to have in the next few years is moving the budget towards balance. How will the government navigate tax increases? You can only tax the wealthy and big businesses so much, and you can only have so many luxury taxes.
How will this government cut expenses, while still having the necessary money to run the country? How will it sustain programs that we need?
Many are likely wondering whether this government can pull off an austerity budget.
The current federal Liberal government had proven themselves to be unfit managers of the country’s finances before COVID-19 hit.
They took a budget that was balanced – a budget that the Tories had finally balanced following the Great Recession of 2008 – and immediately turned it into a deficit.
Remember when Justin Trudeau, before he was prime minister, said “The budget will balance itself?” That didn’t happen.
He’s definitely not Jean Chretien or Paul Martin when it comes to effective Liberal stewards of our taxpayer dollars. Say what you will about the Liberal governments from 1993-2006, but they took a financial mess from the previous Progressive Conservative government, turned it to balance within a couple of years, and provided us with years of surplus budgets.
There is some good news in this year’s budget. There’s lots of good spending. The billions of dollars for child care and early learning will help a lot of people in this country, especially those who are looking to return to the workforce as we move into the pandemic recovery phase.
And it’s good to see that the government is talking about additional money for carbon capture and storage, although we’ll see whether or not it translates to support for the needed retrofits of the Shand Power Station and/or Unit 6 of the Boundary Dam Power Station.
There’s speculation of whether this will be a budget that will trigger a federal election before the summer. The Liberals want to go to the polls; despite their blunders, the polls indicate there is strong support for the governing party. The New Democratic Party says they’ll support the budget; of all the federal parties, they’re likely the ones who least want an election.
So the budget will pass, some programs will get some much-needed support, other spending will be misappropriated, and we’ll continue to find ourselves in a financial mess.