People wear face masks as they board a city bus in Montreal, Nov. 7, 2020, as the COVID-19 pandemic continues in Canada and around the world.Graham Hughes/The Canadian Press
The not-a-budget that was Monday’s federal fiscal update contains a promise to spend “up to $100-billion” on “smart investments that have value now, and well into the future.”
So what will the money go to? Beats us. Finance Minister Chrystia Freeland’s document contains a lot of wish lists, the biggest without price tags, but it never marries up the wishes and the $100-billion pledge. That’s what makes this fiscal update more like a Throne Speech – or an election platform.
The update says the $100-billion will only be spent once the virus is in check, and it consistently uses the word “investment” to describe this money. And because it’s investment – meaning one-time spending – the various possible scenarios in the fiscal update all show that investment spending dropping to zero after three years.
But some big-ticket items the fiscal update hints could be announced in next spring’s budget, and which are not one-off programs, look poised to be dropped into this $100-billion box of supposedly one-time investments.
For example, the update promises that the government will come up with a national child-care plan. It also repeats, somewhat less enthusiastically, the repeatedly repeated promise to create a national pharmacare program.
These are both good ideas. They will be difficult to negotiate with the provinces, because everything is difficult with the provinces, especially Quebec. As a possible hint of its negotiating strategy, Ms. Freeland’s update says that just as Canada once followed Saskatchewan’s lead in medicare, so it will now follow Quebec’s lead on child care.
But even if Ottawa and the provinces reach funding deals for child care and pharmacare, those are ongoing commitments, lasting for decades. They can’t be paid for by one-off stimulus spending. They need a permanent tap, with funding from a permanent revenue source.
The feds are also facing calls from the provinces for a big increase in the Canada Health Transfer, the annual allotment that Ottawa gives the provinces; the Trudeau government has now committed to redesigning – read, spending more on – the fiscal stabilization mechanism within the equalization program.
Given unlimited money, or at least some new sources of federal tax revenues, those are good ideas, too. Federal funding for health care, which started out as a 50-50 split with the provinces, has fallen to a fraction of that. There are strong arguments for the feds upping their financial contribution – but if they do so, that’s an ongoing commitment of major dollars to a program with no sunset clause, and which will be a big-ticket item in every future budget. Ottawa can’t pretend this is one-off spending that will stop in three years.
The fiscal update also says that the up-to-$100-billion investment is at least in part supposed to make Canada “greener” and “more inclusive.”
So what’s a postpandemic spending program that gets people back to work, is an investment rather than consumption, is enviro-positive, is inclusive – and ends after three years, so Ottawa isn’t borrowing in perpetuity?
May we suggest some big investments in public transit?
Right now, transit ridership in Canada is way down, for obvious reasons. But once the pandemic is history, ridership will shoot back up.
It has to. Cities such as Toronto, Vancouver and Montreal will choke on their own traffic congestion, while eviscerating Canada’s climate goals, if everyone tries to commute by car.
And in any case, a substantial percentage of people living in and around Canada’s largest cities can’t afford a car. It’s an issue of equity: They shouldn’t be forced to incur the considerable expense to buy, park and insure a car, simply to live life and hold down a job.
A plan to invest in a lot of new transit doesn’t have to be about megaprojects. For example, the Toronto Transit Commission is right now rolling out priority bus lanes on its busiest suburban routes. How much faster and more frequent could service be, all over Toronto, if the TTC suddenly got its hands on hundreds of new buses?
For millions of Canadians, including millions of low-wage essential workers, from food services to health care, public transit is the most essential of public services. A bus that comes every three minutes is life-changing. A bus that only comes every 30 minutes is literally a job killer.
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