OTTAWA—Ottawa’s emergency financial aid to unemployed workers risks acting as a “tranquilizer” on the economy by deterring people from taking jobs, Conservative Leader Andrew Scheer says.
“As businesses start to slowly reopen and have shifts to fill, their employees are being forced to turn them down or risk losing their benefits,” Scheer told reporters Monday.
“At a time when our economy needed stimulus, Justin Trudeau has given it a tranquilizer and risked creating labour shortages across the country.”
The Canada Emergency Response Benefit pays people who have lost income due to the virus $500 a week for up to 16 weeks. However, the benefit is cut off if a person earns more than $1,000 a month. By Apr. 28, 7.3-million Canadians had applied for the benefit and it had paid out $25.6 billion.
But Sheer says unemployed workers could face having to choose between returning to work — and losing the benefit — or electing to ride out the uncertainty of the economic recovery for as long their benefits last.
“It’s not difficult to understand the choice that many will be forced to make,” he said.
Scheer called on government to revamp the program so there is a gradual reduction of the benefit tied to income, “so people are always better off for taking available work.”
Prime Minister Justin Trudeau didn’t reject the idea Monday but said it’s too soon to consider it.
“I really look forward to facing that challenge of how we start to scale back the benefits and help people get back to work. We’re not there yet,” Trudeau said during his daily pandemic update.
“We’re very much still trying to make sure that people are getting the support they need even as the economy is starting to gradually reopen.”
Dr. Theresa Tam, Canada’s chief public health officer, said Monday that the country is starting to “inch closer” towards social and economic reopening.
“In some places, the epidemic has been brought under good control and the time is right for cautious reopening. Other areas of the country may not be quite there yet but will soon follow,” Tam said.
But with close to 60,000 cases and 3,766 deaths, Tam said that Canadians will have to reconcile themselves with the reality of living with COVID-19 and the public health measures that requires.
Meanwhile, Trudeau said the “tremendous” uncertainty facing the country and tens of billions of dollars in aid flowing out the door makes it impossible to present a budget with any sort of accuracy.
“A budget typically is an expression of what people can expect in the coming year, both in terms of how the economy is going to unfold (and) what sort of measures are going to be brought in, and in normal times, it’s usually pretty accurate,” he said.
“Right now, we’re in a situation where there is a tremendous degree of uncertainty.”
Premier Doug Ford’s government faced a similar predicament in Ontario and opted instead to release a fiscal update in March with a full budget promised for November.
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Still, the prime minister insisted that his government has been “extremely transparent” about its spending and said that “reflections” on when the government could present a budget or just an economic update are “ongoing.”
Scheer said his party would like to see a statement of the government’s finances soon. “Before Parliament adjourns for the summer, I think that an update, a budget, a plan to manage the economy for the next several months is necessary,” he said.
Ottawa says it has provided at least $145 billion in direct support and another $85 billion in tax deferrals. The Parliamentary Budget Officer has estimated that the federal deficit will be $252.1 billion in 2020-21.