The November 30, 2020 economic update unveiled by new Finance Minister Chrystia Freeland was frightening. The accumulated budget deficit of two years of close to $ 500 billion alone is staggering.
MI am Freeland also specifies that it would like to inject up to an additional 100 billion dollars to revive the economy – without providing details. Some of the federal programs poorly calibrated since the start of the pandemic (those targeting students and retirees thought) remind us that billions have been deployed in the wrong places. Meanwhile, vital sectors of our economy, such as air transport, are still waiting for confirmation of assistance.
The Trudeau government does not inspire the most confidence when it comes to economic measures. We know that Bill Morneau, seen as one of the only members of government with an economic profile, has tried to moderate the prime minister’s reactions to spending since the start of the pandemic.
MI am Freeland, always ready to take on the job from a colleague, especially if the march brings her closer to the top of the podium, replaced him in August 2020, and today finds himself in the focus of a precarious budget year rapidly approaching.
Last December, Prime Minister Trudeau achieved great success by recruiting Michael Sabia to the position of deputy minister in the Finance Ministry. Mr Sabia left the Caisse de dépôt et placement du Québec in February 2020. For Mr Sabia this is a return to his roots, as he began his career in the Canadian Public Service.
It would be unfair to not consider his time on Caisse a huge success. Sure, his appointment in 2009 was surprising. Other candidates were contacted with more specialized skills in financial markets and portfolio management. Mr Sabia came from CN and BCE, which are undoubtedly big companies, but their main operations were a far cry from those of one of the largest pension funds in the world.
The strong performance of the economy during his time at Caisse was no stranger to Mr. Sabia’s success. His biggest contribution, however, was to raise the profile of the team at Casey. He’s successfully recruited extremely talented men and women from here and elsewhere while Caisse still had bad press. Better yet, he convinced many Quebecers who had gone abroad to return to the fold to use their talents for the benefit of our savings. The fund he inherited in 2009 and the fund he inherited to his successor, Charles Emond, couldn’t be more different.
We can guess his tenure in Ottawa will be in a different order. The government he leads is now leading in the polls, despite the huge gap in vaccine supplies.
So the lure to go to the polls this spring for a majority mandate is likely to be strong in the prime minister’s camp.
What voters forgive today will turn out very differently in the fall if many industrialized nations vaccinate the majority of their citizens and Canada is still lagging behind.
While Mr. Boy and Mr. A.I am Freeland is embarking on the preparation of the federal budget, and hopefully, it will not take inspiration from the financial aid program just approved by Congress in the United States. The amounts the Joe Biden government will pump into the economy ($ 1.9 trillion) are the same as President Trump approved in March 2020 at the start of the pandemic. Therefore, the Democrats preferred to double the stakes, while ignoring that the private sector will be an important lever in the second half of 2021 when strong economic growth is expected. It reminds us of the importance of having politicians who do not constantly seek to please lobby groups and who are indifferent to the use of public funds.
Michael Sabia’s appointment is not trivial. There was a long list of candidates in the Supreme Civil Service who managed to hold the position of Deputy Minister of Finance. When choosing Mr. Sabya, did the Prime Minister appoint a leader to lead him through the pandemic fog or, rather, someone from the private sector willing to support a torrent of election expenses? Many Canadians wish Mr. Sabia was the adult in the room.
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