During his daily press conference this past Tuesday, the Prime Minister was asked when Canadians might expect a fiscal update on the government’s response to the COVID-19 pandemic, since the total bill was closing in on $150 billion. Reasonable question, right? But rather than opine on when, the PM chose to explain why not. “A fiscal update that talks about what our revenues or projected expenditures could be six months from now or a year from now would be incredibly unreliable,” Prime Minister Trudeau said. And, he’s right.
Words are important here. A fiscal update carries with it increased analytical rigor, broad stakeholder engagement and detailed projections. In the current context, with the impact of COVID-19 playing itself out in real-time across large swaths of the economy, making any sort of projection is fool-hardy. Furthermore, not only would a fiscal update need to lay out the budgetary impact of policy actions taken by the government in the last several months but also account for tax revenues, EI payments, provincial transfers, pensions and other government activity. Accounting for all of this and packaging it into something similar to an Economic and Fiscal Update or a portion of a Federal Budget would require a huge lift by both government officials and the political level at a time when their energy and resources are best focused responding to the global pandemic.
An economic update however makes much more sense. Rather than projecting what the books might look like down the road, this kind of update is a snapshot of where we stand today. It would include elements such as global economic developments, Canadian employment numbers and wage growth, an update on the housing market and immigration trends, and, perhaps most importantly, firm accounting on program spending. While this would still be a considerable amount of work, it would be spread across government rather than landing squarely on the shoulders of the Finance Department, and would mean avoiding having to game out the impacts of the ongoing COVID-19 pandemic and chances of a vaccine, not to mention the outcome and impact of the most important US Presidential election in recent memory.
To date, most Canadians have supported the government’s response to the pandemic. Indeed, the Prime Minister’s public opinion numbers have never been higher. Were an election to be called he would likely regain his majority. But as hard as the past few months have been, the coming year will be even more challenging as support benefits and programs are pulled back. For the Finance Minister not to provide Canadians with an economic update before Parliament wraps up and folks turn their full attention to summer is a surefire way to waste the goodwill that’s been won and to start the recovery phase on the back foot.
