House Call with Carol Hughes

Report indicates there’s room to grow social programs

The Parliamentary Budget Officer (PBO) provides members of Parliament (MPs) with independent analysis on the state of the nation’s finances, the government’s estimates and trends in the Canadian economy. The office will also provide estimates for the cost of any proposal under Parliament’s jurisdiction if requested. We have even seen the costing of party platforms during elections performed by the PBO. One regular offering is an annual fiscal stability report. That provides PBO’s assessment of the sustainability of government finances over the long term for the federal government, subnational governments and public pension plans.

That report for 2020 was delivered by the Parliamentary budget officer, Yves Giroux, in late February. He said that based on current policies and programs, the federal government could permanently increase spending or reduce taxes by around $41 billion and maintain its current debt-to-GDP ratio over the long term. Put another way, we are in no danger of running up debt that cannot be paid and can do more with national revenues if we choose to.

That said, it’s not all good news and the PBO’s assessment was less rosy for many provinces, especially Manitoba, Saskatchewan and Newfoundland and Labrador, which are in danger of being swamped by debt over the long term. Part of the reason is rising health care costs as well as anticipated declines in the amount of money provinces are expected to receive from the federal government. Giroux says the federal government, which has faced pressure to change the formula for deciding which provinces receive equalization payments, could use some of its own financial room to help those provinces.

For everyday people the PBO’s report won’t be top of mind. They are more concerned with challenges that relate to their own financial stability and less so with those of the nation. The federal government may be financially sustainable, but that doesn’t count for much when what is offered are service cuts. That’s when millions of Canadians take notice. Tax breaks, while sounding appealing, rarely flow to those in the most need which is why program spending offers more impact as a national investment. 

New Democrats have laid out a plan that would help people get the services they need, and work with the provinces to deliver programs like pharmacare and dental care. They point out that this minority government has a choice to make between helping wealthy individuals and big corporations or working with MPs who are promoting ideas that can help people in every province.

They remind us that over the last 10 years, the provinces have lost out on $31 billion in health care funding which is why it’s no surprise that some provinces are struggling. Given the challenges we are seeing with the extra-ordinary measures required by the COVID-19 coronavirus it’s worrisome that too many provinces aren’t financially sustainable, especially when rising health care costs are a major cause.

Just five years ago, when this government was in opposition, they criticized Conservative health care cuts to provinces, but then kept the cuts once they won power. That saved the federal government billions but hurt the provinces’ abilities to provide important services for Canadians. At a time when the government should be investing in health care to beef it up for moments like this when we face special challenges, they chose to give big tax breaks and literal handouts to wealthy companies like Loblaws and Mastercard. The time has come to turn the tide and use our economic advantage to help more people by building programs like pharmacare and dental care inside a better funded health care system.