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Fiscal update in Ottawa: No easy fix, but a blank canvas emerges

Photo Credit: THE CANADIAN PRESS/Justin Tang

Photo Credit: THE CANADIAN PRESS/Justin Tang

Finance Minister Bill Morneau tabled his much-anticipated fiscal update on Wednesday, July 8, highlighting the impact of the COVID-19 pandemic on Canada’s public finances.

The most striking part of the 168-page document is that, through the summary of the historical spending leveraged by the federal government to contain the pandemic, the Trudeau government is not already committing to a clear path forward. It justified this decision by alleging the difficulty to formulate accurate short-term or long-term forecasts through the ever-changing nature of the pandemic.

So, no tangible deficit “fixes” or related new policies for now. But a stark reminder that COVID-19 has absolutely ravaged our economy, and that the federal government sparred no effort to protect Canadians. Indeed, according to Minister Morneau, “the current best economic policy is to continue to contain the spread of the pandemic”.

As the health and safety of Canadians took precedence, the federal government chose to immediately supply help to those who needed it. This is the main factor behind the projected $343 billion deficit for this year. The federal government resolved to shoulder the debt of Canadians: indeed, 90% of direct funding ($212 billion) provided to Canadians came from Ottawa. It helped save millions of jobs and control household debts. It kept some businesses afloat and helped prevent the collapse of our healthcare system. Our country’s core foundations survived.

So, what now? From NATIONAL’s perspective, the government will spend the upcoming weeks and months crafting policies aimed at reigniting a struggling economy. And it will continue to engage the Industry Strategy Council announced in May 2020. One must see the current absence of a formal game plan as a blank canvas of sorts. The government is listening for ideas and policy proposals that can spur economic activities. And this dynamic will inevitably pit industries against each other.

What this means for organizations and businesses

The ability to align your priorities with the government and to gain nonpartisan support is key in this current minority parliament context, and will be worth even more in the wake of COVID-19. Each opportunity to express your opinion can yield results if leveraged the right way. The Trudeau government is known for its ability to listen. Now is the time to articulate a compelling advocacy strategy that could put your industry and your interests ahead.

The House of Commons’ Standing Committee on Finance (FINA) launched its 2021 pre-budget consultations a few weeks ago. Interested parties have until August 7 to formulate policies and ideas to help rebuild the economy. Few sectors were sparred by the disruptive force of the pandemic. This consultation is therefore a prime opportunity for stakeholders to articulate their current hardships or express how their sector can lead the way. And let’s not forget about the above-noted Industry Strategy Council, a business-centric forum that adds one more channel through which the government will gather feedback to craft new policies.

The current context calls for clear and concise government relations asks. Pressing needs are likely to be considered over long-term demands.

Your industry deserves to be heard. Your bilingual, pan-Canadian government relations team at NATIONAL can help your voice break through. Contact us to learn more.