Facing Bitter Truths: The True Cost and Shortcomings of the Trudeau Government’s COVID-19 Response

By and large, Canadians have been mostly supportive of the government cheques from the various COVID-19 programs—the Trudeau government has accordingly seen a surge in popularity that would likely result in a majority government for the Liberals if an election were held today. 

However, Canadians will soon discover that while these programs feel like freebies, this couldn’t be farther from the truth. On his podcast ‘Money Talks,’ economist Michael Campbell discussed the true cost of the Liberal government’s massive spending program in the wake of the coronavirus pandemic. 

When taking into account old age security promises, public sector pensions, guaranteed income supplements in addition to COVID-19 spending, Campbell estimates that the real cost of government debt for this year will reach an unprecedented 3.2 trillion dollars.

“Someone born today will pay interest on this year’s borrowing every year for the rest of their life. With this in mind, it’s young people that will pay the most for existing borrowing and spending. The fact of the matter is, we can only pay off this massive debt in three ways: reducing government services, implementing higher taxes, or achieving massive economic growth. The last is simply not a priority for the Liberals. The vast majority are motivated by ideas of income redistribution through new government programs like free prescription drugs, subsidized daycare and guaranteed income. They don’t give a thought to growing the economy, so they fall back on raising taxes. I hope I’m wrong, but I believe COVID-19 will be the cover for unprecedented massive tax increases. I’m talking about higher capital gains taxes, an income tax on businesses and higher-income individuals. Maybe an official inheritance tax. The Liberals may even co-opt the wealth tax proposed by the NDP and the Green Party’s last election. We’re soon going to find out the real cost of the free lunch, and it isn’t going to be pretty.”

The Trudeau government’s spending program has also been met with skepticism from sitting Conservative MPs.

During the special committee on the COVID pandemic, finance critic and prominent Conservative Pierre Poilievre engaged in a rapid-fire debate with the government’s finance minister Bill Morneau in an attempt to discern the extent of the COVID response’s addition to the national debt.

“Poilievre peppered Morneau with questions about the federal debt at least eight times, at one point asking the finance minister if he knows ‘What $1 trillion is,’” reported CTV News last May.

Although Morneau replied to his counterpart that “we are continuing to make investments that we believe are prudent in the face of this economic challenge, supporting Canadians as we know we need to,” the finance minister “did not reveal any numbers relating to Canada’s federal debt nor its deficit” in response to Polievre’s inquiry.

With inmates at a jail in Trois-Rivieres having mistakenly received CERB cheques, the government is slipping up as government money is falling through the cracks to those who don’t properly qualify. The extent of this slippage—worsening an already-ballooning national debt—will only become apparent in years to come, as the details of mismanagement slowly trickle to the surface.