Time Is On My Side

3 minute read

With the 2021 Budget consultations having wrapped this past Friday you’d think the government would want to cherry-pick the best ideas and get the Budget out in a matter of a few weeks. (I mean, how hard can it be to spend $100B?). After all, we haven’t had a federal Budget in over two years (706 days to be precise), the Opposition has been calling for an economic plan for months, and stakeholders certainly appear ready judging by the length of the recent Finance Committee report. But for the government, rather than focusing on these outside voices, they should instead be listening to the words of the Glimmer Twins, and remember that time is on their side.

The past few weeks have been tough for the government with the choppy COVID-19 vaccine rollout. Recent polling seems to back that up. But the tide appears to be turning, with welcome vaccine delivery news. Canada is set to receive close to 450,000 Pfizer vaccines a week between now and the end of March, and close to 11 million by the end of June. Hundreds of thousands of the Moderna vaccine are also expected, with the potential of others on the horizon, pending Health Canada approval. All told, it’s expected that 14.5 million Canadians will be immunized byJune. The result of this vaccine influx is increased pressure on the provinces. It will also be on Minister Freeland’s mind as she plots when to release the Budget, for two reasons. First, the more people who are vaccinated the better it is for the economy. And second, since Canadians have somewhat soured on the federal government it may be best to wait for the pendulum to swing back rather than deliver a Budget into those headwinds.

Sticking with the emotional argument, it would seem smart to get past the Groundhog Day feel of the winter lockdown before coming to Canadians with a recovery plan. While we’re past the darkest point of a Canadian winter, typical Budget dates of mid to late March tend to have snow still on the ground for much of the country. It makes more sense for the federal government to wait until spring has truly sprung, spending time outside becomes less of a chore, and moods improve with longer days and brighter skies. Better to be catching that wave of good vibes than trying to bribe people with tax dollars.

But perhaps the strongest, and scariest, reason to wait is the impending (inevitable?) 3rd wave. Projections released Friday paint a grim picture of what might happen as new, more contagious variants take hold and replace previous strains. Increased infection rates could mean prolonged lockdowns, a further shuttering of thousands of businesses and, ultimately, prolonged government spending on crucial, but expensive, benefit programs. By waiting to see what a 3rd wave looks like (hey, who knows, the surprising and unexplained downward trend globally and in Canada may continue), the federal government will be better equipped to respond with the appropriate fiscal medicine.

Ultimately, if the federal government plays their cards right with Budget timing it could help position them well electorally. Rather than rushing to put out Budget 2021, a wait-and-see approach gives them greater control of their electoral destiny. 

One other winner of a late Budget? Stakeholders. The longer thewait, the more time for engagement and persuasion of decision-makers. Stakeholders ought to use this extra time wisely by further refining their proposals and applying a laser-like focus on proving their recommendations will help create jobs and contribute to economic growth. That’s time well spent as we stay huddled in doors.

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