By Medicine Hat News Opinion on April 24, 2021.
The average Albertan owes more than $28,000, not including mortgage. Total household debt in Canada combines for 112% of the country’s GDP. And businesses nationwide are in jeopardy of shuttering doors unless they hit the ground sprinting once we actually leave this elongated health crisis behind.
No matter what you think of the economy, or MLAs who ignored surging cases and urged full reopening as the worst of a once-in-a-century deadly pandemic hit, the circulation of money does matter.
It matters a lot.
If ever there was a time to ensure Canadians of every income bracket have spending cash, it’s now and into the immediate future. And the economy is going to need more than whatever it is we called “normal” 15 months ago, as the jolts necessary to revive and then thrive this thing are going to require something beyond a province where more than half of urban Albertans fall within $200 of going broke every single month.
Continuing a decades-long strain on personal finances won’t do anything for businesses (or employees) that retracted or restricted during COVID. In fact, if you haven’t already figured this out, even if the virus disappeared tomorrow, “non-essential” businesses are the last to the trough, so to speak – as in, they rely on people having money left over after life’s necessities, or “essentials.”
That means businesses suffering most during the pandemic will also benefit last when it ends – a crappy reality but reality nonetheless. The good news is there are blatantly obvious things we can do to offset the pain, and one is even being offered by Ottawa right now.
There are a million reasons why Canada needs a universal subsidized childcare program, and why we needed it yesterday.
But it seems in our individualistic monetary society, personal financial loss or gain is all that grabs attention from a proper-sized audience.
And if Canada actually adopted a nationwide $10/day childcare program, it could do little else to stimulate the economy and still the boon and ripple effect would be unlike our pre-pandemic society provided.
As noted above, Canadians (and Albertans especially) are in a lot of personal debt – combined to more than double the federal government’s December 2020 tab of 54% of GDP – and with or without COVID-19, continuing to support the economy that way is risky business. We don’t go a single day without politicians or pseudo think tanks like the Canadian Taxpayers Federation using catastrophic language about government debt being unsustainable, but why don’t we ever see these folks standing on the side of a road beside a “personal debt clock?”
Debt for individuals is expensive, as credit cards, lines of credit, auto loans, etc. come with high interest rates. Unlike you, governments borrow at a much cheaper rate, and in fact, at the federal level – and despite the misinformed opinion that “debt-servicing costs” are out of control – Ottawa is borrowing at the lowest interest rate in 80 years and, in dollars adjusted for inflation, is paying the lowest amount of interest it has since the 1980s.
David Macdonald, a senior economist with the Canadian Centre for Policy Alternatives, recently broke down the numbers in anticipation of last week’s federal budget. His point was – especially during COVID – the government is spending so you don’t have to.
“While the word ‘deficit’ has a negative connotation, the word ‘surplus’ has a positive one,” he wrote. “However, both are just two sides of the same accounting transaction…
“What we tend to forget is that when a government carries a deficit for something like protecting people from a global pandemic, they’re saving someone else from carrying that same deficit – households, for instance.”
As we eventually exit this pandemic, governments will need to turn their attention from protection to stimulation.
Childcare is among the largest expenses a parent or family has – for many in Alberta it costs mortgage-payment-type money for each child. Shaving that down to $250 a month for full-time care puts thousands back in the pocket of every parent who requires it.
Think about how much instant cash that puts into the economy. Think about how many more customers your business gains when Albertans have more money to spend. As a parent, think about the options it would provide to you by way of college funds, extra curricular activities, or, say, a car that works.
Coming out of this pandemic, two things are going to happen simultaneously. On one hand, many are going to be wary of expenditures due to the income losses of COVID, and that lack of consumer confidence will continue to hurt the economy. On the other is people whose isolation fatigue will result in the exact opposite, and their overconfidence will worsen an already horrible personal debt crisis.
A mass childcare program is an inexpensive way for governments to solve both. One doesn’t need kids to reap the rewards either, because unlike corporate shareholders whom our premier spends his deficits on, Alberta’s parents live here and spend here.
The UCP is going to use words like “cookie-cutter,” “one size fits all” and “choice” in its effort to convince Albertans that a made-in-Ottawa childcare plan is bad. Don’t listen to the spiteful dog-whistling of the least popular government in Canada.
There are a million reasons why we should implement a nationwide childcare plan. But what more do we need besides, “Everyone gets more money”?
Read Macdonald’s piece here: https://monitormag.ca/articles/record-deficits-you-mean-record-surpluses-for-dirt-cheap
Scott Schmidt is the layout editor at the Medicine Hat News. Contact him at firstname.lastname@example.org