Photo: Adrian Wyld, The canadian Press
The parliamentary budget officer in Ottawa, Yves Giroux, said that he was concerned by the unprecedented situation that comes without the ability of immediate oversight on the part of the Parliament.
The Trudeau government has given discretionary powers unprecedented to respond to the crisis of the COVID-19 command of a transparency and parliamentary oversight is just as important, warns the parliamentary budget officer in Ottawa.
“I find it very very worrying “, hammered Yves Giroux, Tuesday, at a video conference before a Senate committee looking at the economic consequences of the pandemic of sars coronavirus. The Council of ministers, when this is not the minister alone, has the power to announce billions in aid, create new Crown corporations or to decide the new transfers to the provinces as they see fit.
The parliamentary budget officer has said, understand the importance of ensuring the government the maximum flexibility and rapidity of action. “These powers are unprecedented,” he points out, however, and ” come without the ability of immediate oversight on the part of the Parliament “. “Fortunately, these powers were limited in the time “, but, in the meantime, it is hoped that the government will at least show all the “transparency” as possible, and that the elect would follow him to the track.
The minister of Finance, Bill Morneau, could you begin by presenting a budget update and financial, he suggested. It is true that the current situation presents a lot of uncertainty, but this has not prevented, in the last month, the Bank of Canada to provide, at the very least, of possible scenarios.
An addition salt
One thing is for certain, all of this will be expensive, has confirmed that Yves Giroux. More expensive even than its last estimate.
At last count, he had set up this shortfall from Ottawa to a little more than 252 billion at the end of the year. But it was on the basis of the measures announced a month ago. Since, ” the government has made new announcements almost on a daily basis “. The cost of these new measures is expected to be approximately $ 7.6 billion, for a total deficit of 260 billion, he estimated before promising a full update of its financial analyses somewhere in the month of June.
To the members of the committee who expressed their concern at the magnitude of this deficit, Yves Giroux reiterated that, given its debt ratio is relatively low before the start of the pandemic coronavirus, the government of canada still has a certain financial leeway, the weight of its debt relative to the size of the economy. However, ” it is certain that we will not be able to stay on this path more than a few years. A sharp shift will be necessary. “
But before that, the economy will probably need even a little help from the public authorities to ensure, in particular its reboot. To do this, you must not rely too much on the Bank of Canada at which there is not a lot of ammunition. No, the main load will return to the government which may, for example, make tax cuts or spending programs, but then “very targeted” because to him it will not be a lot of ammunition to use.
Good note Poloz
Passing in turn before the senate committee, the governor of the Bank of Canada, Stephen Poloz, reiterated a little later in the day for all the good he thought of the measures deployed by the federal government. Targeted specifically to support the income of workers and businesses affected rather than the gross domestic product, they should have protected enough confidence to avoid that the economic downturn is prolonged dangerously.
In regard to the means of action available to the central bank, its governor is reassuring. If it is true that it can be difficult to lower a lot a rate that is not more than 0.25 %, and that the bulk of the work of economic recovery will have to be done by governments, all other measures of injection of liquidity to ensure the smooth functioning of the financial markets can still be muscular.