According to Bill Morneau, “as Minister of Finance, my only job is to make sure that Canadians can keep food in the fridge.”
That’s actually a rare useful thought for a federal finance minister to keep front of mind in calamitous circumstances like the present ones.
It’s also a hopeful sign that Prime Minister Justin Trudeau’s Liberal federal government is prepared to plow $87 billion as quickly as possible into fighting the catastrophe that threatens us, and likely more later, without letting dogmatic conservative talking points about debt and deficit get in the way of sound policy.
It’s certainly a refreshing contrast to the clown show in Edmonton, where Premier Jason Kenney, Stephen Harper’s man on the barricades for the 1%, is hell bent to implement his fantasy-based austerity budget between trips to the airport’s safely empty arrivals level for publicity shots.
“Incredibly,” wrote economist Jim Stanford in a post on the Canadian Centre for Policy Alternatives’ Behind the Numbers blog, “Conservatives like Jason Kenney and Pierre Poilievre have still been scare-mongering about deficits, even as the public health emergency gathered momentum.
“Kenney in particular should be politically shunned for his incredible decision to attack Alberta’s doctors and rip up their employment contracts (alongside his other attacks on public health workers) just as we ask them to risk their lives, to save ours,” continued Dr. Stanford, an Edmonton native who is director of Australia’s Centre for Future Work. “This tired old deficit-mania will have zero resonance with the public in coming months: they are quite rightly preoccupied with more important things.”
Well, it may not have been a wise and provident god that kept Andrew Scheer and the Conservative Party of Canada out of the Prime Minister’s Office last October, but by god it was a wise and provident Canadian electorate that hesitated at the last minute!
One shudders to think how Mr. Scheer would have reacted to COVID-19. It wouldn’t have been pretty. It probably would have involved deep tax cuts for oil companies and billionaires that would have eventually left us in a bigger hole than the imperfect Liberal program, and without its benefits.
The thing is, if you look through the policies being put forward by Mr. Morneau — as CCPA Senior Economist David Macdonald did in an extremely useful summary yesterday — you will see that the first of its good if insufficiently aggressive ideas won’t come into effect until next month, and some much later than that. That means cash is unlikely to get into anyone’s hands before May.
As Mr. Macdonald explained, “this package of measures has to pass a vote in the House of Commons first.” And it wouldn’t be a complete surprise if Mr. Scheer and company tried to throw roadblocks in its way.
That’s bad because, quoting Mr. Macdonald again, “we can’t sweat the small stuff when we’ve laid off the entire retail, food and hospitality sectors in a single week. The effects of keeping them off work for only a few weeks will be economically catastrophic.”
University of Calgary economist Trevor Tombe suggested yesterday that March 2020 may show the biggest one-month employment drop in Canadian history.
In other words, even without considering the health implications of this crisis, it’s terrible now, but it’s going to get worse — driven not just by the global COVID-19 pandemic passing like tsunami over our heads, but the fragility and brittleness of the neoliberal worldwide “just-in-time” distribution system that has been cobbled together over 30 years while none of us paid attention. It was a disaster waiting to happen, and now it has.
If you haven’t noticed this already, you will when the toilet paper runs out.
And is there even a single manufacturer of medical ventilators in Canada today?
What we need now, Dr. Stanford observed, is to “go big, go fast.”
“We don’t yet fully realize the scale of the layoffs and their economic impact,” Mr. Macdonald said. “Here’s to hoping that governments are already planning for Phase Two.”
Indeed, if there is any lesson here it’s that now is the time for a guaranteed universal annual income, from which our country would benefit for generations.
The countries that come out of this worldwide phenomenon in the best condition and the fastest will be the ones willing to spend more and spend it fast.
Like World War II, to which the COVID-19 crisis is increasingly being compared, this is no time for timidity or hesitation.
Once more unto the breach, dear friends, once more!
Alberta COVID-19 update
With 22 new COVID-19 cases confirmed yesterday, Alberta now has 119 confirmed cases, with infected individuals found in all of Alberta Health Services’ five zones. The provincial hotspot is Calgary, with 83 cases. Of these cases, six are currently hospitalized, three in intensive care. Multiple infections appear to stem from a dental conference in Vancouver in early March.
And it should be noted in his rebuttal to the Liberal’s mature and thoughtful response to the unfold economic disaster wrought by COVID-19, Andrew Scheer went off on the deficit. That’s right. That’s all Scheer cares about is the size of the deficit that this action may result in. Once again, it is proven that when Canadians rejected the CPC in the last election, they dodged a bullet.
Of course the only concern any rational person should have about this policy action is that will the funds be used properly and provide an income support for those in need? Or, will be be used by large corporate beneficiaries to buy up their already heavily deflated stock? I sure the shareholders are screaming for such a thing.
It’s happened before. In the aftermath of the 2008 Financial Crisis, the US Federal Reserve made trillions of dollars available to the damaged credit markets. Zero-cost loans were made available to buy up toxic assets and permit the take over of collapse financial institutions by their more solvent rivals. The result was bigger institutions buying up assets with public funds – hundreds of billions of dollars worth.
All those heavily discounted shares were bought up and the stock markets recovered. A miracle was proclaimed, and corporate America made out like bandits.
Follow the money, because the same thing is about to happen again.
An attempt to do the same thing as the last rip-off is being undertaken, but I am dubious about the potential results. Harpo hid the Canadian bail-out, using the particular traits of Canada’s mortgage casino scheme to essentially perform Quantitative Easing to save the Canadian branches of Barclay’s and State Street banks from their rightfully earned oblivion. It is difficult to say what effect the withered real economy of North America has on the peyote-trip derivatives miasma. The US had to rejig the way they count those who are no longer part of the consumer game, having been relegated to the massive permanent underclass, but using the old metrics unemployment could be 20-odd percent in Mordor. So if the financial conjuring isn’t too dependent on people actually doing any work, they may get the Electric Acid Hindenburg airborne again, but the rolls of those requiring bread and circuses are likely to be much longer than we have seen since the 2009 Great Heist.
Perhaps any federal aid to Alberta should only come with a guarantee from Jason Kenney that he won’t cancel out its benefits with destructive austerity measures. Jason Kenney is not a wise man.
Yes, we can see things much clearer now in hindsight. Justin Trudeau and his cabinet (and especially his Minister of Everything, Chrystia Freeland, perhaps the finest political product to come from Alberta, ever!) have performed remarkably well, given the histrionics over the last few years in N.America. His steady leadership has given Canadians the shot of confidence and resolve they needed to step into that breech and help resolve this crisis.
I cannot imagine Scheer doing anything beyond collapsing on the floor and weeping.
I am not too worried about the one or two week delays in getting cash out; this is going to be a long campaign. A long campaign with some very sobering moments. There going to be circumstances ahead in which considerations of how your going to wipe yer bum will be the very last thing on anyones mind.
I expect that the Canadian gov’t may again be required mount another package of similar proportions, perhaps more than once.
And Kenney? Who knew that Doug Ford would provide better governance than Kenney?
Kenney has, it seems, been in hiding. Low key, unsure and unavailable. This kind of decision making was not what he had signed up for. He’s much more capable of pulling the wings off butterflys and taking things away from people. A $4.5 billion gift to petro-corps but only, if you say pretty please and jump high enough, $50 million for the working people in the province.
There is a $2.6 billion price tag on oil-field clean up in this province. That’s approximately the right amount and the right kind of make-work stimulus that we need to be looking at to come out of this crisis in a form somewhere close to normal.
Good luck everybody!
The clean up cost is closer to $260 billion.
https://www.aldpcoalition.com/
ahh yes! .. thank you Kang,
as they say, a $billion here, a $billion there … pretty soon you’re talking real money!
We already know who is most at risk from the virus — seniors & people with chronic diseases and compromised immune systems. But, the group most at risk from the economic fallout is different — it’s low-wage, non-union & gig economy workers, as well as more traditional independent contractors in all kinds of service industry occupations.
Case in point: we have a married daughter who works an office job in a dental clinic that has just shut down, & she’s been laid off. Her husband works as a survey party hand, but he’s currently self-isolating at home after a coworker’s wife showed symptoms after they’d returned from Mexico, & she had to be tested. They have a 5-year-old daughter who won’t be able to finish kindergarten as a result of the closing of the schools. They live paycheque to paycheque, & they rent — from an individual, locally-residing, middle-class landlord, not from some faceless property management company — and they aren’t sure they’ll be able to stay in their home on EI, even if they do get it quicker & with fewer regulatory hurdles than usual, since it only pays 55% of wages.
There are going to be tens of thousands of Alberta families in just this sort of situation, and there is no sign that Kenney, Toews & Co. will have their backs.
While the Federal government’s response seems fairly aggressive, I am concerned it could be overly bureaucratic. The response seems to be a myriad of programs like EI that will eventually reach some people, but not others affected by this. I have to wonder how the government can even process all the EI claims at this time when many government workers are not even working right now. While it sounds good, the government covering 10% of business wages is not going to encourage any small business to keep staff on longer, while their cash flow depletes. Time is of the essence here and if money does not flow until May at the earliest, it will cause both people and our economy additional financial disruption.
If ever there was a case and a time for helicopter money, it is now. Just send every person a cheque for $500 or $1,000 or some fixed other amount to cover basic expenses and figure out later, who qualifies or not and tax it back later if needed.
Some were paying attention to the transfer of manufacturing to the third world and China, but no one was listening. Liberal, PC, and Conservative governments continued to sign trade agreements that eroded sovereignty and hollowed out our manufacturing base. Now we reap what was sown through these acts, beholden largely to China for essential medicine and medical equipment. Trump was one who spoke out not just in his presidential run and win but for several decades prior to that. Perhaps this will wake some up from their TDS but it is unlikely, it is too easy to fall into the orange man bad hole.
Is it too soon to ask how much Morneau will personally profit from this given what his company does? It is good to see that they are doing something rather than just making things worst like Kenney, but the majority of the money will land in the bankers hands.
Now someone has reported a non-compliant member of the community who attended that dental conference in B.C. and disregarded quarantine. Of all the things that can spread coronavirus, mouths do it. Thank you to whoever complained and put a stop to this person’s reckless behavior.
“Typhoid Mary 2020”. It’s a thing. If people who can afford to stay home won’t, people who can’t afford to stay home won’t. This is why we need plans in place to ensure that they do.
Typhoid Larry, more like, actually. DJC
Oh golly, I hope that the Covid-19 response does not in any way resemble the response to The Big One. The War started because the British and French lied to the Polish military dictatorship, encouraging it to maintain it’s belligerent response to Nazi Germany’s territorial demands while refusing the Soviet Union’s pleas to form a front against the Nazis. So we had a two-year phoney war in which Poland was destroyed, and in which the French, who outnumbered the Germans in 1939 in the West with over one hundred divisions to Germany’s 23, drove a few kilometres into the Saar and went home, before surrendering to Nazi Germany’s horse-drawn army a few months later. The British Empire got busy bombing civilian infrastructure, and Canada sent it’s army to England so that the Empire’s other forces could run around the Mediterranean and it’s Asian possessions, and in the end tens of millions of Europeans and Asians died, including the twenty-odd million Russians whose armies actually defeated the Germans, and the millions of Chinese whose armies actually did all the killing of the Japanese. In order to give western Europe to Barclay’s Bank, whose French branch head worked with the Nazis during occupation, and stayed on with the company until his retirement in the sixties after providing his new partners with his Jewish account holders’ funds. Barclay’s is now the principal shareholder in all the Canadian big banks.
So perhaps instead of psychologically and cognitively integrating a bunch of contradictory nonsense cooked up by Capital’s lackeys in various levels of government and media, we might use factual evidence to inform our approach to counter the effects of the virus.
Good summary. DJC