March 2, 2021

Soknacki2014

The Number One Source For Business

Jack M. Mintz: In government spending and deficits, we’re now No. 1 in the world

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Note that the CRB is subject to a 50 per cent clawback for each dollar earned above $38,000. Because the payment does not differentiate between full-time and part-time work, however, most part-time workers will get the entire benefit — unlike full-timers paid the same weekly wage. Thus the CRB will act as a work disincentive, causing many part-timers to delay joining the work force.

Overall, so much federal money has been spent that on average Canadians have more personal income today than they did pre-COVID — even though average employment income has fallen dramatically. Doling out money may be a politician’s dream, but it will be a nightmare for our children and grandchildren when the bill comes due.

In Canada, we have had little discussion of whether so much spending is really necessary. At least in the United States they debate such things. For months now, driven by election politics, Democrats and Republicans have wrangled over a second stimulus bill. After proposing $3 trillion in spending last May, of which one-third was for state governments, the Democrats have come down to $2.2 trillion (all values reported here in U.S. dollars). Republicans, worried about the national debt, have proposed a $500-billion “skinny” bill, including a $300 enhanced unemployment benefit, funding for school openings, a subsidy for the U.S. Postal Service, and a $500-billion renewal of the Paycheck Protection Program for small business. President Donald Trump, worried about his election prospects, has proposed a $1.88-trillion package, including a $1,200 one-time stimulus payment and subsidies for specific airlines and other industries.

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