MNI INTERVIEW: Canada Opposition Tolerates Deficit In Pandemic

Canada's new main opposition finance spokesman told MNI he can accept Prime Minister Justin Trudeau's record deficit spending for now if there's more success in tackling the Covid-19 pandemic, indicating his party will not seek to force an election.

Conservative Finance Critic Ed Fast, a former trade minister, said in an interview late Wednesday he wants time to assess his position on the central bank. His predecessor Pierre Poilievre criticized BOC Governor Tiff Macklem including in parliamentary hearings for a QE program he suggested was recklessly printing money.

Fast is more focused on the fiscal picture, suggesting that while record deficits and debt aren't an intractable problem for now, the Liberals made mistakes by advancing so many programs too quickly. He pointed to last month's big job decline as evidence the plan is fraying and said the Liberals are hurting the recovery by holding back major natural resource projects that are the country's traditional strength.

"Let's get Canadians back to work. And then we can have a discussion about how we address the immense fiscal challenge that our country will face post pandemic," Fast said.

Canada's debt is heading to a record trillion dollars and Finance Minister Chrystia Freeland has put off restoring "fiscal anchors" the government moved away from even before the pandemic.

SLOPPY SPENDING PLAN

"In terms of the government's promise to spend, spend, spend, spending is not in itself an economic plan," Fast said. "When we see this disastrous vaccine roll out, it cannot be providing Canadians with any confidence that the Trudeau government knows what it's doing." Trudeau has said Canadians will be vaccinated by September amid reports of delayed vaccine production shipments from abroad.

Freeland's office did not immediately respond to a request from MNI for comment.

Fast struck a cautious tone about opposition parties uniting to force Trudeau's government from office, saying that while the lack of a full budget last year was "a profound failure," the new fiscal plan Freeland is working on will be judged "on its merits."

"While this pandemic is still underway, we want to make sure that the support is there. And you will have seen that we as a party have not been critical of having support programs in place for Canadians," Fast said. "We want to make sure that the budget supports Canadians during their time of need, while at the same time provides the toolkit required to get Canadians back to work."

STOP STRANGLING RESOURCE PROJECTS

The Liberals don't have enough votes to pass a budget without some opposition support and are approaching the halfway point of a regular four-year term where many minority governments lose control and head to an election. Opposition parties last year were supportive of fiscal relief approaching 20% of GDP that was the strongest among big economies, but the Liberals still found trouble with a botched youth jobs program, an attempt to prolong emergency powers and with Bill Morneau leaving as finance minister.

The government's focus on "building back better" with potential new social programs also misses the point the existing economy is still badly damaged, Fast said. Freeland plans spending up to another CAD100 billion after the virus is under control and is consulting Canadians about infrastructure, expanded childcare, more tools to fight climate change and building a fairer economy.

Businesses are reporting that "this economy is languishing, and as of yet, there are no real signs that the economy has turned around," Fast said. "So we have to take every step possible, to properly, safely open up the economy."

One clear way to add jobs would be scaling back legislation the Trudeau government passed that created tougher reviews of major resource projects and restricted some oil tanker traffic, Fast said. "The federal government needs to get out of the way, stop strangling our resource industry," he said. "It is becoming increasingly difficult and in many cases impossible to get reasonable projects approved," and "like it or not, Canada has a resource-based economy."

On the Bank of Canada and other issues, Fast said he won't have the aggressive style that Poilievre became known for. "I want to make sure that I have the facts and information required to properly advise our leader about what steps we should be taking and what we should be saying about the various strategies that could be employed to help our economy recover," he said when asked about his views on the central bank.

"You'll likely find me to be a hopefully a measured voice that holds the government accountable for its failures, but also acknowledges that it is important that we as parliamentarians put the interests of Canadians first, to ensure that at the end of the day, we have a stronger, more prosperous country and a healthier one."