This week Canada’s Parliamentary Budget Office (PBO) released the 2021 Economic and Fiscal update report for Parliamentarians.
The reports tells us that: “Since the start of the COVID-19 pandemic, the government has spent, or has planned to spend, $541.9 billion in new measures over 2019-20 to 2026-27, of which $176.6 billion (or about one third) is not part of the COVID-19 Response Plan.”
The office also notes that there is $57.8 billion in new spending that will be related to the Liberals 2021 election platform.
One interesting observation from the office is that Canada has now recovered 106 per cent of jobs that were lost at the outset of the pandemic.
Despite this positive news, the PBO notes that the government has also dropped previously announced plans to wind down stimulus spending by the end of the 2021-2022 fiscal year.
Noting that the labour market in Canada has now recovered, the PBO questions the need to continue to spend billions on stimulus spending despite previous plans to wind that spending down.
From my perspective here locally, one of the most frequent concerns that I hear is from pensioners and families who are struggling to keep up with inflation at the pumps and at the grocery stores.
I have also heard from small and medium sized business owners about the difficulty they have filling jobs, and worsening supply chain issues leading to shortages that lead to increased prices for goods and services.
Many are worried that more stimulus spending may only further increase inflationary pressures making goods even less affordable.
Given Canada’s current employment numbers, low interest rates, coupled with higher levels of government spending both in Canada and the United States during a time where we have seen continued supply chain issues, leads to bigger questions around inflation.
Statistics Canada has recently reported that Canada’s inflation in December was running at 4.8 per cent. Economists have noted that this is the largest surge of inflation we have seen in 30 years.
My question this week relates to stimulus spending and its role in the economy. While the debate in Ottawa will continue on the need for more stimulus spending versus winding it down, what is your opinion here locally on stimulus spending?
Dan Albas is the Member of Parliament for the riding of Central Okanagan Similkameen Nicola and the Shadow Minister for the Environment and Climate Change.
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