Canada's COVID Financial Rescue Response

"The policies of the government in power, and the proclivities of the current prime minister, are not particularly oriented toward the hard work of generating economic growth, and that can make things difficult for the Department of Finance."

"Budgets used to be budgets. They were always political documents, but they were also built around the numbers and some explanation of those numbers."

"It's a lack of discipline and a lack of focus on actually delivering. You send out a press release and that's seen as the end game, whereas the real issue is in actually governing."

David Dodge, former Deputy Minister of Finance, 1992 - 1997

 

"One of the things we've seen throughout the past decades in government is the trend toward more control in the Prime Minister's Office."

"Actually, it can be traced as far back as my father [Pierre E.Trudeau, the 'Northern Magus'], who kicked it off in the first place."

"And I think we've reached the end point on that."

Prime Minister Justin Trudeau, pre-2015 election -- promises, promises

Finance Minister Chrystia Freeland, right, and Prime Minister Justin Trudeau

"The lack of transparency around the government's intentions in its economic and fiscal forecast is not acceptable in a democracy."

"I think everyone should be concerned about this."

Don Drummond, formerly Department of Finance 

"I think the Finance Department has been a bit diminished in terms of its positioning in the city and its power base -- not just recently but starting under [former Prime Minister Stephen Harper] Harper."

Scott Clark, Deputy Minister of Finance, 1998 -- 2001

"There is always a tendency to yearn for the good old days."

"People have been complaining about the centralization of power in the Prime Minister's Office since at least Trudeau senior."

Jennifer Robson, professor, national finance, Carleton University

An empty store up for rent is seen on Montreal's Sainte-Catherine Street, on Monday, June 8, 2020. Nine months into the COVID-19 pandemic, the government has yet to reveal where billions of dollars in pandemic aid has gone. (Paul Chiasson/The Canadian Press)

 

According to Dr. Robson, claims of a diminished Department of Finance seem to compare current circumstances to the early- and mid-1990s when the Chretien government listened to the department. And the reason for that was the Chretien government's Minister of Finance, Paul Martin, had resolved it was past time to have the country balance its budget and clear away its deficit at a time when debt costs were six times the current rate, a time when Canada's bonds were being ignored by investment funds.

This was when Canada saw austerity budgets when the Prime Minister's Office and the Finance Department were in lock-step agreement. The country has returned to huge deficits and a burgeoning national debt occasioned by spending decisions made by the current Prime Minister, agreed to by the reigning Minister of Finance, and made manageable only because interests rates continue flat. Canada has outspent its G20 counterparts by a large margin in COVID-relief social programs with no end in sight, and little oversight.

Moreover, a government that promised time and again that its decision-making would be taken in an entirely visible manner, accountable for all actions, explanations available through fully transparent accounts. In reality what has transpired is a completely opaque situation, with former senior Finance officials deploring the unacceptably opaque actions of the Trudeau government. Officials describe an increasingly centralized power base resulting in the Prime Minister's Office capturing full authority not to be questioned or challenged.

 

And while some level of disagreement has been traditional between the PMO whose decisions are based on political considerations and the fiscally staid Department of Finance whose position of sober second thought was meant to guide the government, the current situation vastly transcends traditional differences that have been slight and manageable. The current government's position is a reflection of its leadership's focus on progressive social activism with policies revolving around redistribution, questions of economic balance irrelevant.

 

The grating lack of accountability surrounding spending measures has given heartburn to economists and former executives of the Ministry of Finance. The current Finance Minister tabled a fiscal update at the end of November promising between $70 billion and $100 billion in stimulus spending over three years, declining to detail where any of the outgoing extravaganza in funding would be directed. No fiscal anchor has been provided since the pandemic struck; no indication of how or when the government may rein in emergency spending allocated for COVID.

 

Following the Finance Minister's update an entirely new package of spending was announced; $15 billion in subsidies targeted to guide Canada toward exceeding its climate targets. The U.K. and Australia, among other developed economies, have tabled budgets during the pandemic, while Canada's government has provided high-level spending in two fiscal 'snapshots'. The Liberal government of Justin Trudeau continues to float costly and evidently permanent measures to "build back better".

 

"Their ability to push back against dumb ideas, or to ask where the money is going to come from, has gone out the window", commented one former finance officials on the condition of anonymity. 

 

Conservative MP Pierre Poilievre says that, nine months into the pandemic, it's time for the government to tell Canadians more about where the money has gone. (Adrian Wyld/The Canadian Press)

"[There is] an enormous transparency gap [when if comes to what the Canadian and the U.S. governments have revealed about where the money has gone — a gap the government should be pushed to close]."

"We should know more where that money is going. These are tens and tens of billions of dollars in business supports. It's a key part of the overall stimulus."

"And not knowing really ... reduces our ability to understand how these programs are working and what role can they play in terms of supporting the economic recovery going forward."

Former parliamentary budget officer Kevin Page, now CEO, Institute of Fiscal Studies and Democracy, University of Ottawa