It is no exaggeration to say that the world and Canada are now at war with a virus which threatens human lives, our health care system and the economy. As in all wars, the goal of victory takes priority, the normal rules of the game should not apply, and what must be done should be done without undue concern for the cost.
How does Canada’s fiscal response to the coronavirus stack up so far relative to the rest of the world? Data compiled by the IMF suggests that the totality of Ottawa’s announced measures rank somewhere in the middle among major western economies. Part of the measurement challenges involve disaggregating the direct spending component (e.g., extending unemployment insurance, food assistance, grants, funding for hospitals and health care infrastructure) versus items such as state guarantees for loans to businesses, or tax relief/deferment. Unlike Washington, Ottawa seems to have prioritized relief to individuals over corporate bailouts, but even here is less generous than most major European Union counterparts, as well as the United Kingdom.
Like many of you, I’m at home in self-isolation. My house is comfortable and my garden is coming to life through my window so it’s not so bad. All things considered, I’m pretty fortunate. But many others are having a very difficult time.
On March 18, the federal government announced an aid package to help workers and businesses affected by the COVID-19 pandemic. The package includes $27 billion in wage supports and enhanced benefits, and $55 billion in deferred income tax payments. It is supposed to ensure that workers and small businesses have the financial support they need to follow public health advice and stay home.