Criticism of our Prime Minister, Justin Trudeau on his handling of the Covid-19 pandemic received a lot of media attention for the early failures to halt incoming flights and the Health Ministry waffling on contagion and mask wearing. Now along comes a financial update and the MSM once again appears enamoured! One wonders why?
To quickly summarize we first had one of two Rhodes Scholars in the Trudeau Cabinet, Minister of Finance, Chrystia Freeland, present a fiscal update telling us the deficit has reached $381 billion in the current year. She also announced planned spending of another $100 billion to stimulate the economy.
Shortly after Minister Freeland delivered the bad news about the huge deficit; she was interviewed by BNNBloomberg. In the December 4th interview she referenced the BMO Chief Economist, Doug Porter and his remark about the $170 billion in cash held by businesses and households. Porter stated: “I do see the cash mountain, in both Canada and the U.S., as a serious source of potential upside to next year’s growth”. According to the Bloomberg report the CIBC had earlier suggested savings by households in Canada was at $90 billion and $80 billion by businesses. When queried about that “cash mountain” Minister Freeland said: “It would be great if that money could go towards our recovery. I want to make an offer to your listeners. If people have ideas on how the government can act to unlock that preloaded stimulus, I am very, very, interested!”
What is readily apparent is that the unlimited spending that created the $381 billion deficit, plus the additional $100 billion she promises to spend, is not (in her mind) enough to make our economy rebound so she wants us to spend whatever we may have left, if any, for those rainy days ahead. The planned $100 billion in spending is “intended to build a greener, more inclusive, more innovative and competitive economy — will launch after a vaccine is distributed and life begins to return to normal.”
Well, as it happens, either she wasn’t willing to wait until that “vaccine is distributed and life begins to return to normal” or she became impatient we didn’t immediately crank up our spending!
As we recently saw some of that $100 billion will be spent on planting trees, paying subsidies if you buy an EV, etc. etc. according to the report from Jonathan Wilkinson, Minister of the Environment and Climate Change titled “A Healthy Environment and a Healthy Economy”. Wilkinson’s will spend $15 billion along with $6 billion from the Infrastructure Bank on “clean infrastructure”. It is all “green” in his Rhodes Scholar’s mind but included with plans to spend money on green things are a huge increase in the “carbon tax” and the implementation of the “CFS” (clean fuel standard) both of which will take billions of tax dollars out of our pockets each and every year. The average family of four who Freeland wants to “unlock that preloaded stimulus,” may have tucked away $10K for a rainy day, the down payment on a house, their children’s education or even retirement. Having viewed the waste of the Trudeau government over the last five years I have doubts they see any rainbows in their future and are reluctant to rush out and spend their savings!
Those households will see those new taxes meant to “green” Canada are not an inducement to spend their savings or perhaps, for them to even have faith in the future of the country.