Prime Minister Justin Trudeau is dismissing pressure to release a fiscal update as his government plans to spend more than $150-billion in response to the COVID-19 pandemic.
For weeks, opposition parties and the Parliamentary Budget Officer have called on the government to release a fiscal update. On Tuesday, the Bloc Québécois made its support for the minority government’s latest bill contingent on the Liberals releasing a fiscal update by July 1 along with two other demands.
Mr. Trudeau on Tuesday told reporters any attempt to square the massively increased spending with the federal government’s bottom line would be "an exercise in invention and imagination.”
“A fiscal update that talks about what our revenues or projected expenditures could be six months from now or a year from now would be incredibly unreliable,” Mr. Trudeau said.
Mr. Trudeau was asked whether his government would table a fiscal update before Labour Day but did not directly answer the question, instead presenting a rationale for not releasing one.
In response to the Prime Minister’s comments, Conservative MP and finance critic Pierre Poilievre said Mr. Trudeau “is desperate to hide the mess he has made.” Given the state of the Canadian economy, he said it’s “no wonder the government is avoiding a fiscal update.”
Budget watchdog Yves Giroux told a House of Commons committee in mid-May it was “past time” for the government to release an update. While he acknowledged the added uncertainty caused by the pandemic, he said the government should at least be able to release an update with revenue and spending expectations.
The PBO has also said that when the new spending is combined with lower tax revenue from reduced economic activity, the current federal deficit could exceed $250-billion and total debt could hit $1-trillion.
Asked whether tax hikes or program cuts are on the table to pay for that debt, Mr. Trudeau said, “because of historically low interest rates the debt servicing costs will be low" and said his government would remain “fiscally responsible.”
The House of Commons will meet Wednesday to debate a government bill that proposes new fines and penalties for fraudulent claims related to the Canada Emergency Response Benefit.
The government shared a draft version of the bill with opposition parties on Saturday. NDP Leader Jagmeet Singh dismissed the bill as “ludicrous” and said his party would not support it as initially proposed. The Conservative Party has not said how it vote, but has previously raised concerns about fraudulent CERB claims and repeatedly called for a fiscal update.
The Prime Minister said his government’s planned crackdown on people who wrongly claimed income support during the crisis will not target people who made "honest mistakes” and rather focus on “deliberate fraudsters.”
In addition to a fiscal update, the Bloc wants the government to organize a first ministers meeting on health transfers and for the Liberal Party to refund all wage subsidies from COVID-19 programs.