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The next federal budget – landing in April? May? Bueller? Bueller? – has to be about the future.

For the past year, Canada has been living day to day, with Ottawa focused on keeping Canadians solvent and the economy turning, by borrowing and spending massively in the here and now. The challenges of today left little room for tomorrow. Last summer, when the Trudeau government hinted at a fall filled with big, new initiatives for a postpandemic world, we urged the government to give its head a shake and focus on the deadly pandemic present. Before moving on to the postwar, you have to win the war. Six months ago, the war was far from over.

But six months later, signs are that the omnipresent pandemic is about to become history. Barring disaster, such as the rise of new, vaccine-resistant coronavirus variants, Canada is poised for a reopening. The economy is growing faster than expected, and Canadians are sitting on more savings then they’ve had since the 1990s – setting the economy up for a consumer-powered recovery.

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By putting so much money into the hands of Canadians during the pandemic, money that could not be spent at businesses that were not open, the Trudeau government in effect front-loaded a lot of postpandemic stimulus. That, plus an American economy about to be jolted by another US$1.9-trillion of stimulus from Washington, means that Finance Minister Chrystia Freeland, who last fall proposed up to $100-billion in postpandemic simulative spending, can safely budget for far less.

A present turning out better than expected is an opportunity, and a challenge.

The challenge is that, while borrowing massively is what the Trudeau government was supposed to have done during a recession, it risks becoming habit-forming. Sending out cheques makes politicians popular, but the scale of the borrowed money dispensed this past year could only ever be a limited-time offer. It’s not remotely sustainable.

Ms. Freeland need be in no hurry to balance the budget, and even her predecessor’s fiscal anchor, of a flat to declining debt-to-GDP ratio, doesn’t have to be achieved for a few years. But she has to begin winding down a situation where Ottawa is not just borrowing heavily, but doing so to spur spending today, not investment for tomorrow.

In the circumstances of 2020, Ottawa made the right moves. But circumstances are changing, fast.

Ottawa’s excessive repetition of “build back better” may be cringe-inducing, but it’s a sound idea. Who doesn’t want a better future? What else is government for? The real debate is over what better would be, and how to get it.

The Trudeau government ought to be thinking about doing “better” in two areas: programs and investments that raise Canada’s productive capacity; and programs and investments that improve the health and lives of Canadians.

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When it comes to investments, such as in public transit, Ottawa has more leeway to justify borrowing, precisely because each infrastructure investment is a one-off. If it can figure out how to minimize cost overruns and poorly chosen projects (both growing problems in public infrastructure), investment here makes sense.

As for increased spending on social programs – spending that continues indefinitely, and usually increases forever – it’s harder to justify borrowing. As a result, even good ideas for new programs will call for tradeoffs.

For example, the Trudeau government has repeatedly signalled that it wants to expand taxpayer-supported child care, and also create national pharmacare. There’s merit in both ideas, and this page has long supported making drugs part of Canada’s universal health care system, perhaps through an improved version of Quebec’s public-private model. We’d also suggest the Liberals do what Liberals do best, and steal the New Democrat Party’s denticare idea – so all health care, not just doctor and hospital care, becomes affordable.

However, such programs are perennial commitments, requiring money, and lots of it, year after year. Absent either hard choices moderating spending in other areas, or new revenues, Ms. Freeland will be hard-pressed to bring big, transformative changes to health care or child care.

What’s more, both of these areas of Canadian life are provincial bailiwicks, so doing anything means dealing with the provinces. That’s a whole other challenge, but it’s not necessarily insurmountable. More on this, next week.

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