Analysis & Comment

COMMENTARY: Trudeau overspent on COVID? Let’s see if voters care

It’s pretty mind-bending to stop for a minute, take a deep breath, and think about all the money Ottawa has blown out the door in pandemic relief spending.

The Justin Trudeau government projected back in May that it was on pace to spend $152 billion in direct support to Canadians impacted by COVID-19.

As the pandemic drags on, there’s potential for that number to soar. The budget deficit is projected to swell more than one thousand per cent higher than expected, while Canada’s accumulated debt may eclipse $1 trillion for the first time ever.

These are astronomical numbers, unimaginable before the pandemic struck back in the spring.

But Trudeau found himself in the same position as governments around the world, facing a highly contagious virus that threatened to kill thousands and overwhelm the health-care system unless economically damaging lockdowns were imposed.

So the relief money started to flow like never before, with little complaint from opposition parties, apart from urging Trudeau to spend even more.

Now, six months into the crisis, the scale of the historic spending effort is becoming more clear.

And what’s emerging is evidence a lot of the COVID-19 relief loot went to people who didn’t really need it.

Many of the relief programs launched by the Trudeau government were not means-tested. Generous eligibility rules meant many people qualified for assistance, even if they came from well-to-do homes.

The Fraser Institute, a right-leaning think tank, analyzed federal government spending on new COVID-19 relief programs (like the Canada Emergency Response Benefit or CERB), as well as one-time payments linked to existing Old Age Security, the Guaranteed Income Supplement and the Canada Child Benefit.

The conclusion? Out of $81.6 billion in spending analyzed, more than a quarter of the money went to people who might not have needed it.

For example, the study found nearly one million young people aged 15 to 24 collected the $2,000-a-month CERB benefit, even though they were still living with their parents in homes with a household income of $100,000 or more.

It was a similar story for adults collecting the CERB despite having high-income spouses. More than 480,000 spouses, who earned less than $24,000 in 2019, collected the CERB despite total family incomes of $100,000 or more.

Students living with their parents in homes with family incomes greater than $100,000 pocketed more than $1 billion under the Canada Emergency Student Benefit program.

Families earning more than $100,000 last year received $503 million in one-time top-ups to the Canada Child Benefit. And seniors not eligible for the low-income-targeted Guaranteed Income Supplement, because they made too much money last year, still collected $1.4 billion in one-time emergency payments.

Want another indicator? As a percentage of total GDP, Canada’s overall COVID spending outpaced many other developed countries.

Of course, there’s another side to this story.

Canada’s success at managing the virus is certainly better than the experience of our closest neighbour and ally, the United States.

And Canadians as a whole are quite satisfied with Trudeau’s pandemic performance, according to the polls.

Those polls are surely of great interest to Trudeau’s governing Liberal Party right now, with Ottawa awash in speculation about a possible snap election call.

I doubt Trudeau is worried about having to explain to voters why he was too generous to them during a once-in-a-lifetime crisis.

And new Conservative leader Erin O’Toole could have a tough time making the argument anyway, when the opposition barely squeaked in protest when the money was flowing.

Did a lot of that money flow to Canadians who probably didn’t really need it? Clearly. What’s less clear is if record spending, soaring deficits and deepening debt will matter much to voters at election time.

Mike Smyth is host of ‘The Mike Smyth Show’ on Global News Radio 980 CKNW in Vancouver and a commentator for Global News. You can reach him at mike@cknw.com and follow him on Twitter at @MikeSmythNews​.

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