Tories, NDP at Odds Over Government Spending as Liberals Prepare Fiscal Snapshot

OTTAWA—Opposition parties have laid out their demands for the federal Liberal government as Ottawa prepares to update Canadians on the countrys finances after four months of COVID-19—and where it expects the economy to head for the rest of the year.

Wednesdays fiscal snapshot will be the first public assessment of the countrys economic and financial situation since the pandemic started in earnest in March, forcing provinces into lockdown and the Liberal government to start doling out billions in aid in lieu of a federal budget.

The snapshot is expected to give an idea of how the government sees the rest of the fiscal year playing out, including figures for a potential deficit.

But the Conservatives and NDP made clear on July 5 that they want more than just numbers: they want action. That includes additions, changes and expansions to federal COVID-19 support programs along with more accountability and transparency.

Yet while the Conservatives also called for the Liberals to produce a plan to get government spending under control, the NDP warned against any premature efforts to cut federal assistance.

Conservative finance critic Pierre Poilievre on Sunday blasted the Liberals handling of the economy while small business critic James Cumming underscored the importance of accurate fiscal projections and planning from the government for Canadian business.

“What business needs as they start to open up is some level of certainty,” Cumming said during a news conference on Parliament Hill.

“They need to understand what the governments finances are to understand how long these programs are going to last to assist them and when they will be starting to phase out. And a lot of that has a lot to do with the financial health of the government.”

Federal figures last week showed direct government spending on COVID-19 supports at just over $174 billion, which included another increase to the budget for the Canada Emergency Response Benefit. That is now expected to cost $80 billion as eligibility increased to 24 from 16 weeks.

At the same time, Statistics Canada last week reported that the Canadian economy shrank 11.6 percent in April—the largest monthly drop on record. That follows a 7.5 percent contraction in gross domestic product in March. Both are expected to hit Ottawas bottom line through lost tax revenue.

Parliamentary budget officer Yves Giroux has previously predicted that the increased spending and lost revenue could combine to see the federal deficit top $250 million this year.

With COVID-19 in retreat across most of the country—at least for the moment—Poilievre said it was time for the Liberals to produce a plan to start getting what he described as Ottawas “fiscal mess” under control.

That includes weaning Canadians off the CERB and getting them back to work by phasing out the $2,000-per-month benefit based on how much they earn rather than simply cutting off anyone who earns more than $1,000 in a month.

“The government is punishing Canadians for working,” Poilievre said. “We think that people on it should be rewarded when they make the courageous decision to go back to work and make a wage.”

Poilievre, who also demanded more money for the federal auditor generals office to better scrutinize government spending during the pandemic, dismissed suggestions that Ottawa needs to keep the taps wide open to stimulate the economy as it starts to reopen.

He instead took aim at various Liberal policies and regulations around natural-resource development, particularly in Alberta and Saskatchewan, as having stunted economic growth and prosperity in Canada.

“Removing these government obstacles is the way you unleash growth and create a cornucopia of opportunity for our workers and businesses that will generate the wealth,” he said. “More deficit spending does not create jobs and growth.”

Bloc Quebecois Leader Yves-Francois Blanchet also called last week for the CERB to be phased out to encourage Canadians to return to work. He made an exception for seasonal workers in the arts, hospitaliRead More – Source