Liberals foresee high unemployment, $343 billion deficit due to COVID-19


petros
+4
#1
They borrowed $296B USD ($411B CAD) for COVID19.

They still have $68B CAD left to blow on penny whistles and moonpies.


OTTAWA - Nearly two million Canadian workers could remain unemployed this year, according to forecasts in the federal government's long-awaited “fiscal snapshot.”

The document released Wednesday details how the Trudeau Liberals see the COVID-19 pandemic dragging down the domestic economy and sending the deficit to a historic $343.2 billion.
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The economic and fiscal report lays out the government's expectation of a slow return to a new normal, with unemployment high and growth low through to at least the end of 2021.

Even though the assessment says the worst of the economic harm from the pandemic is behind the country, the document says a recovery can't begin in earnest until an effective vaccine or treatment becomes available.

Things could, however, get worse under two scenarios from the Finance Department.

Should prolonged shutdowns stay in place, or restrictions not be fully rolled back, a return to normal activity for households and businesses will be uneven and slower than hoped for, leading to a more pronounced drop in economic output than is already expected.

And should the country be hit with a second wave of the novel coronavirus during the annual flu season, the ensuing lockdowns would cause what the Finance Department described as a “deeper and longer-lasting negative impact on the economy.”

The Liberals have repeatedly promised to spend what was needed to put a financial shield between Canadians and irreparable harm. The cost of that promise is now $231.9 billion in direct spending and a deficit comparable only to those seen in the Second World War.

The federal debt is set to pass $1 trillion, by the Finance Department's estimates.

Whatever the costs, they're worth it, Prime Minister Justin Trudeau said in a news conference Wednesday morning, before the snapshot was released.

“As we measure the cost of helping Canadians, we shouldn't forget that the cost of doing nothing would have been far more,” Trudeau said, insisting this is not the time for belt-tightening or austerity.

The document tries to make that case, saying the $80-billion Canada Emergency Response Benefit, which had paid out $53.5 billion in benefits as of late June, has covered Canadians' estimated $44.6 billion in lost labour income through the first half of the year.

The $2,000-a-month benefit is estimated to have covered monthly housing, food, phone and internet costs for the bottom and middle thirds of households, according to Finance Department calculations.

Historically low interest rates mean the hundreds of billions in borrowed dollars come with “manageable” costs, Trudeau said, and the alternative would be for individuals and households to load up with debt themselves to cope with months of no or little work.

Goldy Hyder, president of the Business Council of Canada, said the steep cost to the federal treasury, which has covered about $9 out of $10 in emergency governmental aid, underscored how vital it is to get the economy moving again.

Perrin Beatty, president of the Canadian Chamber of Commerce, noted the deficit and the debt-to-GDP ratio of 49.1 per cent “will undermine Canada's fiscal capacity for decades.” In a statement, he called for a move away from “a subsidy-based crisis response” to efforts that get Canadians back to work.

The snapshot noted a $37.3-billion boost to the federal wage-subsidy program, bringing its budget to $82.3 billion, to account for its extension until the fall. Morneau said details will come soon for businesses interested in the payroll help.

The Canadian Federation of Independent Business called the update a missed chance to help businesses know if they qualify for the subsidy.

“Certainty is a cheap stimulus measure that can help many businesses,” president Dan Kelly said in a release.

The Liberals expect more workers to move onto the wage subsidy and off the CERB as that program winds down.

Those who fall through the COVID-19 financial safety net are expected to be caught by a revived employment insurance system, which has been largely dormant since the CERB replaced it in late March.

Government officials admit there will still need to be policy changes to the EI system to help some self-employed workers qualify, and to capture EI-eligible workers who, due to the pandemic, haven't been able to work the necessary qualifying hours.

“It's not easy. We're in challenging times,” Finance Minister Bill Morneau told reporters. “We're going to make sure we support people to get through these challenging times because we know that's the right thing to do.”

For this calendar year, the government expects the unemployment rate to hit 9.8 per cent, dropping to 7.8 per cent next year based on forecasts by 13 private-sector economists.

Although that's an improvement from the record-high unemployment rate of 13.7 per cent in May for a labour force of just over 19 million, it is still much worse than the record low of 5.5 per cent pre-pandemic.

The Liberals will likely have to lay out a training program for workers in the fall even if the economy improves, said Hassan Yussuff, president of the Canadian Labour Congress.

“Not all workers are going to go back to their jobs,” he said in an interview. “Some of those jobs may not be there for workers at the end of the day.”

Speaking in the House of Commons, Conservative Leader Andrew Scheer said the Liberals failed to provide a plan to stimulate economic and job growth.

“Coming out of the pandemic, every single country on the planet will be desperately competing for the same opportunities and the same investments. So where is the prime minister's plan to set us apart?”

NDP Leader Jagmeet Singh noted the lack of a plan to help with child care, without which parents - and disproportionately women - won't be able to return to their jobs.

“Moving forward, we need to put forward real solutions that address the problems that people are faced with,” he said. “We know the Liberal government won't do it unless we fight and push them to do so.”

And the Bloc Quebecois said the Liberals should have targeted aid at sectors that can expect to suffer the longest, such as aerospace and culture, while targeting multinational corporations and internet giants for taxes to offset some of the spending.

Finance officials write the pandemic may yet “cast a long-term shadow over economic developments” through higher household debt and persistent unemployment. The document said the government will announce new measures as needed to support the recovery.

Sheila Block, a senior economist with the Canadian Centre for Policy Alternatives, said the uncertainty about the course ahead suggested the need to maintain or even increase spending: “Now is not the time for rash spending cuts and a turn to austerity.”

This report by The Canadian Press was first published July 8, 2020.
 
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pgs
+5
#2  Top Rated Post
Get ready to pay more to your local tax man and his big brother Ottawant .
 
Jinentonix
+3
#3
For f*ck sakes, open the goddam economy and protect the most vulnerable. It seems pretty stupid to keep a country shut down over a death rate that's equivalent to the flu during a bad year.
 
Twin_Moose
+3
#4
CBC deflecting for Trudie

Why the Conservatives are going after the Liberals' pre-pandemic spending now

Quote:

The federal balance sheet is a mathematical exercise that has real fiscal and economic implications. But outside of a debt crisis, the greatest value of a surplus or deficit estimate may be as a political idea.

In that respect, the most interesting thing about the $343 billion deficit that Finance Minister Bill Morneau projected on Wednesday is how it might frame the federal debate for years to come.

There is very little actual debate to be had about the current deficit. Almost no one is arguing that the federal government should not have spent nearly $200 billion over the last few months to help Canadians get through a pandemic-induced economic shutdown. The need to continue providing some amount of support through the fall and into next spring seems obvious.

Where there are specific complaints, they tend to be that the government could have spent more and moved faster. As if in response to those critiques, Morneau's 168-page snapshot goes on at length about what the Liberal government has done and makes a point of showing how the federal response in Canada stacks up against relief efforts in other G7 countries.

All of which might explain why the Conservatives stopped short Wednesday of a full assault on the current deficit. Instead, the Conservatives renewed their attacks on the deficits the Trudeau government ran before the crisis. In 2015, the Liberals made an explicit decision to run a deficit and the federal government ran a cumulative shortfall of $54.7 billion between 2015 and 2019.

Watch: Andrew Scheer presses federal government for a pandemic recovery plan

The Conservatives like to argue that the budget was balanced when the Harper government left office five years ago. That's not entirely accurate. In November 2015 — after that year's federal election, but before the Liberals had started to implement their agenda — the office of the Parliamentary Budget Officer released an updated fiscal projection that showed a surplus of $1.2 billion for 2015-2016.

But the federal balance sheet was benefiting from a one-time boost provided by the sale of the federal government's shares in General Motors. In the years following, the PBO projected that the budget would show a deficit of between $3 billion and $5 billion in subsequent years.

For the fiscal year of 2018-2019, the PBO estimated that the federal government's debt-to-GDP ratio — a measure of accumulated debt in comparison to the national economy — would be 27.9 per cent.

The pandemic changed the politics of deficits
In fact, after the Liberal government implemented its spending plans, the debt-to-GDP ratio was 30.9 per cent in 2018-2019. That three per cent difference isn't nothing, but it is the box within which any argument about pre-2020 fiscal policy has to be fought.

Of course, a full evaluation of the Liberal approach before the pandemic hit would have to assess the value of that increased spending. But the 2015 to 2019 era is just the prelude to what's likely to be a larger debate about the shape, size and activity of the federal government going forward........More

 
pgs
#5
Quote: Originally Posted by Jinentonix View Post

For f*ck sakes, open the goddam economy and protect the most vulnerable. It seems pretty stupid to keep a country shut down over a death rate that's equivalent to the flu during a bad year.

What I have been scorned for saying all along .
 
pgs
+5
#6
Quote: Originally Posted by Twin_Moose View Post

CBC deflecting for Trudie

Why the Conservatives are going after the Liberals' pre-pandemic spending now

Yessir the CBC cannot read the writing on the wall . The cupboards are bare , there will be cuts coming their way . If not cuts certainly no increases in subsidies.
 
Hoid
#7
Thank you for looking up the spelling of "bare".

I know that was a lot of work for you.

This and every government on Earth has had to step up and pay for everything so that private enterprise and the global economy were not crushed by the pandemic


Without the debt these governments have undertaken ths world would have ground to a halt and there would be widespread depression.
 
pgs
+2
#8
Quote: Originally Posted by Hoid View Post

Thank you for looking up the spelling of "bare".

I know that was a lot of work for you.

This and every government on Earth has had to step up and pay for everything so that private enterprise and the global economy were not crushed by the pandemic


Without the debt these governments have undertaken ths world would have ground to a halt and there would be widespread depression.

Or else they could have left everything open and mitigated the damages to at risk populations .
 
Hoid
#9
Left what open?
 
Jinentonix
+3
#10
Quote: Originally Posted by Hoid View Post

Thank you for looking up the spelling of "bare".

I know that was a lot of work for you.

Says the spelling nazi twat who can't spell 'phony'.
 
Jinentonix
+4
#11
Quote: Originally Posted by Hoid View Post

Left what open?

Do try to keep up with the conversation instead of asking pathetically stupid questions.
 
taxslave
+2
#12
Quote: Originally Posted by Hoid View Post

Thank you for looking up the spelling of "bare".
I know that was a lot of work for you.
This and every government on Earth has had to step up and pay for everything so that private enterprise and the global economy were not crushed by the pandemic
Without the debt these governments have undertaken ths world would have ground to a halt and there would be widespread depression.

SO how are you planning to pay for turdOWE's frivolous spending?
Believe it or not taking a cash advance on one credit card to pay the minimum payment on another card does not constitute fiscal restaint.
 
Hoid
#13
LOL the frivolous spending that has kept this country going in the face of near total collapse of free enterprise.
 
taxslave
+1
#14
Quote: Originally Posted by Hoid View Post

LOL the frivolous spending that has kept this country going in the face of near total collapse of free enterprise.

A collapse instituted by turdtOWE. The Liberal government has been deliberately holding back economic development in the West since they first took office. Then there is the needless forced closure of businesses because of covid 19 which has infected less than 10% of those promised and killed about .10% of those projected. Far less than other pandemics which had no forced closures of businesses.
 
taxslave
#15
Interesting story from some of the tourism related businesses around here that they could employ more people but can't find help because most of the potential employees are enjoying an extended holiday courtesy of the taxpayer. CERB is about what many of them earn so no reason to go to work. Hell the BC government even passed a law that you don't have to pay your rent if you don't want to and cant be evicted for it. Why work?
 
Twin_Moose
+1
#16
Quote: Originally Posted by Hoid View Post

Thank you for looking up the spelling of "bare".
I know that was a lot of work for you.
This and every government on Earth has had to step up and pay for everything so that private enterprise and the global economy were not crushed by the pandemic
Without the debt these governments have undertaken ths world would have ground to a halt and there would be widespread depression.

Who's money is the Lib. Gov. spending? Their own? Or Canadian citizen's personal and combined owned resources money as well as businesses both private and incorporated money?

Outside of the TMPL I am not aware of any other business venture the Fed. Gov. is involved in (still owned by the Canadian taxpayer), pipeline does not make enough to pay the tab, will they raise taxes on Fed. employees only to pay the tab? I don't think so, what's left? Oh yeah private citizens and companies that work in the capitalist system will be the ones picking up the tab.
 
taxslave
+1
#17
Quote: Originally Posted by Twin_Moose View Post

Who's money is the Lib. Gov. spending? Their own? Or Canadian citizen's personal and combined owned resources money as well as businesses both private and incorporated money?
Outside of the TMPL I am not aware of any other business venture the Fed. Gov. is involved in (still owned by the Canadian taxpayer), pipeline does not make enough to pay the tab, will they raise taxes on Fed. employees only to pay the tab? I don't think so, what's left? Oh yeah private citizens and companies that work in the capitalist system will be the ones picking up the tab.

By the time all the bands along the route get their share I doubt there will be anything left in the lines of revenue for the owners(taxpayers). Not that this is necessarily a bad thing but it most certainly won't pay the turdOWE debt.
 
Hoid
#18
Canada adds 953K jobs in June.

The sky has fallen.

Its all over.
 
Twin_Moose
#19
Why has the unemployment rate gone significantly up on your good news Hoid?
Last edited by Twin_Moose; 4 weeks ago at 10:18 AM..
 
Jinentonix
+2
#20
Quote: Originally Posted by Hoid View Post

Canada adds 953K jobs in June.

The sky has fallen.

Its all over.

1/3 of them in Ontario where just a few days ago, you were wondering "what the hell was going on in Ontario" because of the Covid numbers.


But ultimately, half of those 953K jobs added in June were part-time. Skip the Dishes has been really busy.
 
taxslave
+1
#21
Is the budget still on track to balance itself?
 
Hoid
#22
The only balanced budgets have been delivered by the Liberals.
 
DaSleeper
+2
#23
Quote: Originally Posted by Hoid View Post

The only balanced budgets have been delivered by the Liberals.

Proof or Bullshit is called!
 
taxslave
+1
#24
Quote: Originally Posted by Hoid View Post

The only balanced budgets have been delivered by the Liberals.

Never happened in my lifetime.
 
Hoid
#25
 
petros
+2
#26
$411B in the hole in 6 months.
 

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