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Dan-in-Ottawa

Fiscal sticker shock

The country wanted a fiscal update, but the Liberal government delivered a fiscal snapshot.

There was a growing demand for a fiscal update of the federal government finances following the spending response to the COVID-19 virus, as well as the revenue impact from having large sectors of our economy shut down.

But the Liberal government provided what it termed a fiscal snapshot, as opposed to a proper, full fiscal update.

The numbers are staggering.

The deficit for this fiscal year is expected to hit $343 billion. To put that figure into perspective, during the world financial crises in 2009, the federal deficit was $56 billion.

Our total debt in Canada is now expected to hit $1.06 trillion in 2021, significantly up from $685 billion in the previous fiscal year.

Keep in mind, this is the spending to date.

There are still many groups, individuals and organizations, who have received promises from the prime minister for additional financial supports that have yet to be delivered.

Also, of concern is that our debt to GDP has shot up to 49%, from what was projected to be around 30%.

Canada’s credit rating has also been downgraded by one major credit rating agency.

The credit rating downgrade is of concern because credit rating downgrades can increase the interest for servicing the debt. 

Historically low interest rates are helping to keep debt servicing levels lower, and, for now, more manageable. 

The challenge is when interest rates rise, the debt servicing costs increase significantly.

I suspect anyone with a variable rate mortgage knows this well.

The more notable challenge is that this current level of borrowing and spending is unsustainable.

Many financial experts have already cautioned that Canada no longer has the required fiscal capacity if there is a serious second wave of the COVID-19 virus.

As the current program spending is unsustainable, the Trudeau Liberal government will need to come up with a successful plan to transition Canada back into a situation where there is growth in GDP and employment.

At the same time there will also need to have a debt management plan that has a relationship to government revenues as well as expenditures. 

To date the Liberal government has not released any plan of this kind.

There is no finger pointing in this week’s report.

We are all Canadians in this situation together and we will be dealing with these circumstances in our future.

My question this week:

  • How concerned are you at the lack of a transition plan to move Canada forward, and is now the best time for one?

I can be reached at [email protected] or call toll free 1-800-665-8711.



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Happy Canada Day!

Canada Day has long been one of my favourite days of the year. 

It is the one day where we, as a country, come together to celebrate all that makes us proud Canadians. 

This year will be much different.

We will not have:

  • Large community gatherings
  • Parades
  • Local entertainers
  • Important cultural performers
  • End-of-day fireworks. 

In our riding we have seen more and more inclusion of Indigenous First Nations in our celebrations, which has been very positive.

This year, we will all find new and different ways to celebrate what it means to us to be Canadians, as we collectively honour our great nation.

Over these past few challenging months, we have recognized the many brave and courageous Canadians who loyally served us in healthcare, in seniors care, in emergency services and in essential services, often retail work environments.

All these people deserve our gratitude and our appreciation and we thank them.
 
I would also like to take a moment to sincerely thank and recognize members of the Royal Canadian Mounted Police. 

Yes, the RCMP, like any organization, has challenges and certainly have bad actors. 

When these bad actors present themselves, it is vital that these institutions use due process and hold those responsible to account in a transparent way, so that public trust is upheld.

However, it is also important that we not tarnish all RCMP officers with the same brush.  

We must recognize those who bravely serve our communities and never forget the many officers that have made the supreme sacrifice, in the line of duty, for Canada. 

It is often the families of the fallen who are left to deal with their loss privately, while the public moves on.

In addition, we must not overlook that in many communities, the RCMP may be the only resource available. 

The lack of resources for mental health services should be rightfully directed to the various levels of government to rectify. 

Before I close this week’s report I would like to share a few observations.

When we see the recent spike in COVID related cases south of the border and elsewhere, it should serve as an important reminder that we must continue to be cautious and vigilant at all times.

We should also reflect on how fortunate we are to live in a country, that for many decades, has embraced universal health care.  

Our healthcare system is not perfect, but no Canadian who might feel they have COVID related health symptoms is afraid to seek out medical help for fear of being unable to afford the cost of that care. 

That is a wonderful part of being Canadian.

As we reflect on being Canadian, let us not allow hate to divide us, let us embrace a country where we can all share what makes us unique.

Happy Canada Day to one and all.

My question this week: 

  • How will you celebrate Canada Day this year? 

I can be reached at [email protected] or call toll free 1-800-665-8711.



CERB clawback confusion

Some citizens currently receiving the CERB benefit were shocked and alarmed to receive news this week that they “will not receive a (CERB) payment when you complete your next report.”

The reason?

“When you first applied for the CERB, you received two payments; a payment of $2,000 as well as a payment following your initial report. This $2,000 was an advance on four weeks of the CERB, which was issued in order to get money in your pocket as quickly as possible.”

The communication from the Liberal government then goes on to say:

“Because of this advance, you will not receive a payment when you complete your next report.”

In other words, because the initial CERB payment was deemed to be an ‘advance,’ it is now being fully clawed back.

For many citizens, who were completely unaware that this initial $2,000 was considered to be an advance, they are now seriously adversely impacted having had no prior warning this situation was going to occur.

According to the Liberal government, when people submitted their first reports, they were told in advance that this would occur and how this would happen.

As the Opposition shadow minister with the critic portfolio for this file, I feel that it is important that we refer back to media reports on April 8 of 2020. 

In particular Global News reported the headline: “Did you get two CERB payments? It’s not a mistake, minister says.”

The article further quotes that:

“Treasury Board President Jean-Yves Duclos clarified during a press conference on Wednesday. The second deposit is a retroactive payment.”

For many Canadians who heard the president of the Treasury Board declare this $2,000 was a “retroactive payment” and relied on that in good faith, they are shocked and confused to be told the payment was actually an “advance” and will be now clawed back.

Aside from the confusion created on part of the government, I also question the government’s logic on this.

If the intent was to “advance” funds “in order to get money in your pocket as quickly as possible,” this raises an important question.  

We can assume the intent to rush the payment was to avoid placing people into dire financial circumstances. 

So how does fully clawing back an entire CERB payment, with no advance notice, not end up putting citizens into a dire financial situation now?

All of this confusion occurred because the Liberal government did not clarify that this was not a “retroactive payment” but rather an advance. 

The prime minister has had many morning appearances outside of his cottage where this could have easily been clarified.

It has not been.

This follows a trend.

For example, when the CERB program was first announced by Minister of Employment Carla Qualtrough, she said in the House of Commons that the benefit was non-taxable.

We now know it is taxable.

Similarly, the prime minister provided erroneous information regarding student eligibility on the CERB program that to this day not been clarified.

All of these communication errors could result in citizens having support funds “clawed back” unexpectedly.

My question this week:

Does the Prime Minister have an obligation to correct and clarify inaccurate information that Canadians rely on? 

I can be reached at [email protected] or call toll free 1-800-665-8711.



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Heading back in to work

This week, the government announced that the Canadian Emergency Response Benefit (CERB) will be extended by a further eight weeks, which means the benefits will no longer end this July for the earliest applicants.

There have also been reports that the government may change some of the requirements to remain on CERB, although at this time these changes have yet to be confirmed.

Increasingly, we are hearing about other reported challenges created because of the CERB.

Many employers trying to restart businesses have indicated they are often unsuccessful in bringing some employees back, who would prefer to remain on CERB.

This could be due to childcare or workplace safety issues.

In other situations, a worker may be financially penalized if they earn more than the CERB income threshold and may end up actually having less household income from working, rather than not working and just collecting CERB.

This occurs because a worker may earn up to $1,000 and still collect the full response benefit.

However any amount over $1,000 and the entire CERB benefit is cut off.

For both workers and employers this makes our economic recovery even more difficult.

One possible option is to provide incentives rather than penalties for citizens getting back into the workforce.

For example, instead of clawing back the entire CERB payment if someone makes more than $1,000 a month, perhaps they could be able to keep 50 cents of the CERB payment for every dollar made from working above that threshold.

The need to modify the CERB to transition to the re-opening of our economy is an important one.

However, we have to remember that workers should not be forced back into the workplace until it is safe to do so.

My question this week:

Do you think the CERB benefit should be reworked and if so how is the best way to do so?

I can be reached at [email protected] or call toll free 1-800-665-8711.



More Dan in Ottawa articles

About the Author

 

Dan Albas, Conservative Member of Parliament for the riding of Central Okanagan – Similkameen – Nicola, is the Shadow Minister for Employment, Workforce Development & Disability Inclusion.

Before entering public life, Dan was the owner of Kick City Martial Arts, responsible for training hundreds of men, women and youth to bring out their best.

Dan  is consistently recognized as one of Canada’s top 10 most active Members of Parliament on Twitter (@danalbas) and also continues to write a weekly column published in many local newspapers and on this website.

MP Dan welcomes comments, questions and concerns from citizens and is often available to speak to groups and organizations on matters of federal concern. 

He can be reached at [email protected] or call toll free at 1-800-665-8711.



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The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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