L. Ian MacDonald

April 19, 2021

It was only three words, but as a former journalist, Chrystia Freeland would have known that describing the COVID-19 pandemic as “a window of opportunity” for her budget last week could be easily misconstrued.

More on point, the finance minister has been saying Budget 2021 would be “among the most significant of our lifetime.”

Turns out it was both. A pandemic budget, in the midst of a health and economic crisis unlike any other in a century, one that has cost more than 23,000 Canadian lives and millions of jobs, turning our way of life upside down. It did indeed present an opportunity to dispense with the usual focus on fiscal balance and bottom lines, within a consensus imperative that Canada, like other Western democracies, has to spend its way out of the perpetual health and economic Catch-22 of this crisis.

To Freeland’s credit, she embraced the challenge, using every bit of leverage available to her in the fiscal framework and policy toolbox.

Big picture on the fisc, the deficit for the fiscal year  2020-21 that ended three weeks ago will come in around $355 billion, or about 15 percent of Canada’s GDP, and $155 billion in the new FY. Balancing the books is out of the question for the foreseeable future. Meantime, Canada’s debt is expected to double to $1.4 trillion, rising to the 50s in percentage of output from the low 30s, where it had settled in before the pandemic.

And that $70 billion to $100 billion recovery fund she spoke of five months ago in her fall economic statement—she’s using all of it, $101.4 billion over three years and leaving nothing to chance, even with a recovery seemingly underway.

There’s an election in the offing at some point this year, and when that time comes, the Liberals will be looking to run on her budget. In a minority House, nobody knows for sure when the writ will drop, except that it won’t be during another pandemic wave like the one the country is living through now.

Or as Freeland put it at the beginning of her speech in the House: “The most virulent wave of the pandemic we’ve experienced so far.”

Politically, the Liberals aren’t looking for a window of opportunity so much as a window of political opportunism. Fair enough, those are the rules of engagement.

So, to keep those jobs coming, folks, Ottawa is putting another $10 billion in the Canadian Emergency Wage Subsidy, extending it until September to guarantee subsidies for new hires. An incentive for SMBs, small- and medium-sized businesses, that have been struggling with cash flow.

Ottawa is also extending the CRB, the Canadian Recovery Benefit, by 12 weeks, paying applicants $500 a week for the first month, rolling back to $300 for the final eight weeks with a view to phasing out.

Don’t forget child care. Freeland and her colleagues sure haven’t, and she was talking about $30 billion over five years, immediately cutting parents’ day care costs in half and looking ahead to childcare at $10 day by 2026.

Not to be forgotten—child care is a provincial jurisdiction. Welcome to the Constitution, and the division of powers.

Quebec already has daycare at $10 a day. The Quebec position will be that Ottawa simply transfer its share of the child care money to the province. It’s an historic Quebec position—send us the money and we’ll decide how to spend it.  It was the deal maker in the 2004 health care agreement, when the Quebec premier was the federalist Jean Charest. And it will be the position of François Legault on child care transfers.

For seniors, a growing demographic, as baby boomers hit their mid-70s, the Liberals are promising Canadians aged 75 and over a one-time payment of $500, and a 10 percent increase in Old Age Security payments after that.

As for the crisis in long-term care, Ottawa is talking about $3 billion over five years, which in all decency should be nothing more than a down payment in talks with the provinces about renewing infrastructure and hiring more caregivers. If we’re talking about the pandemic budget, nearly 70 percent of Canadian deaths from COVID-19 have occurred in LTCs where residents were scandalously left unchanged, unfed and uncared for.

Looking to the future, there are tens of billions for a green economy, building new technologies and transitioning old ones to deal with climate change, notably the Paris Agreement goal of reducing CO2 emissions by 30 percent below 2005 levels by 2030. The budget sets a new goal of 36 percent reductions, aligned with the higher target President Joe Biden has in mind ahead of a virtual climate summit the US is hosting on Thursday. Conversations about climate and clean energy are going on in every sensible business in the country.

It remains to be seen how Freeland’s first budget, the Trudeau government’s first in more than two years, turns out of at the end of the day. The voters will certainly have something to say about that.

But one thing is clear—she has stepped up and boldly used every means at her disposal.

L. Ian MacDonald is Editor and Publisher of Policy Magazine.