What will the federal government's fiscal 'snapshot' really look like?
OTTAWA -- On Wednesday, Canadians will get the first glimpse of the economic impact of four months of nationwide lockdowns, combined with billions of dollars of COVID-19 aid spending when the Liberals reveal their fiscal snapshot.
The highly anticipated update is taking the place of a federal budget – which was expected in March before the pandemic took hold across the country – and is projected to outline where Canada stands today and some course of action for how it’s to pull itself out of the red.
Prime Minister Justin Trudeau announced on June 17 that his finance minister would present the snapshot on July 8 after mounting pressure by opposition to provide some indication of the country’s financial outlook.
"This will give Canadians a picture of where our economy is right now, how our response compares to that of other countries, and what we can expect for the months to come," he said, adding that a full budget would be unrealistic at this time given the economic uncertainty of the pandemic.
Former parliamentary budget officer Kevin Page says the government likely used the term "snapshot" to temper expectations.
"Don’t expect a lot but on the other hand – and this is an unusual circumstance – normally you wouldn’t see a government releasing an important political document in the middle of the summer," said Page in an interview with CTVNews.ca on Monday.
"They’re being properly forced into it."
While he expects the usual items -- a statement of transactions and a plan for balancing the books, among others -- he said it should look more like a long-term strategy than a one-off glimpse of activity to date.
"Maybe that’s a lot to ask for in terms of an update, but the fact that we didn’t have a budget this year – there’s going to be a lot of pressure for them to have some type of fiscal plan slash strategy," said Page.
"They don’t have a spending line at all, there’s no budget backing in a lot of these programs so there’s a democratic need for our elected representatives to go in and put pressure on the government, whether it’s the overall spending plan or individual components."
Beyond government accountability, he added that there’s a basic societal need for some type of economic overview, particularly amid a pandemic.
"[Canadians] want to know what’s going to happen, is the government going to continue these programs or unwind them, are they going to support the recovery because right now without a vaccine it’s going to look very weak," he said.
On Sunday Conservative finance critic Pierre Poilievre and small business critic James Cumming held a press conference to outline their expectations for Wednesday – namely that the Liberals provide not just numbers but a clear plan forward.
"Taxpayers deserve to know how much the government is borrowing and where that money is going. Workers deserve support as they head back to work. Conservatives stand ready to work with the government to make it happen," said Cumming in a follow-up statement.
They’re also looking to the government to introduce mechanisms to transition people off existing support programs.
Unlike a budget speech that’s presented after the markets close, Morneau is set to table the snapshot in the House of Commons on Wednesday at 1:40 p.m. EST.
BIG TICKET COVID-19 AID ITEMS:
Canada Emergency Response Benefit
- Announced: March 25, 2020
- What: A taxable benefit of $2,000 monthly for up to 24 weeks for workers who have lost their jobs or can’t find work from COVID-19.
- PBO costing for 2020/21: $71.3 billion
- Modification(s): This package was extended from 16 to 24 weeks, increasing its projected value.
Canada Emergency Wage Subsidy
- Announced: March 27, 2020
- What: A 75 per cent wage subsidy program for qualifying businesses for up to 24 weeks to prevent employee layoffs.
- PBO costing for 2020/21: $56 billion
- Modification(s): This package was extended from 12 to 24 weeks, increasing its projected value. The government increased the subsidy from 10 to 75 per cent.
Canada Emergency Business Account:
- Announced: April 9, 2020
- What: An interest-free loan of up to $40,000 for small businesses and not-for-profits.
- PBO costing for 2020/21: $9.335 billion
- Modification(s): The eligibility of this program was expanded – lowering the payroll cut off point from between $50,000 and $1 million to between $20,000 and $1.5 million.
Canada Student Emergency Benefit:
- Announced: April 22, 2020
- What: A taxable benefit of $1,250 for students and $2,000 for students with dependents or a disability.
- PBO costing for 2020/21: $5.9 billion
- Modification(s): The amount paid out to students with a disability or child was increased from $1,750 to $2,000.