Dear Friend,

Below is a commentary that appeared in the Edmonton Sun, Calgary Sun, Ottawa Sun, London Free Press and Toronto Sun. Please share with your colleagues and friends.

Wishing you the best,

Niels

Niels Veldhuis | President
The Fraser Institute
1770 Burrard Street, 4th Floor, Vancouver, BC  V6J 3G7
www.fraserinstitute.org ([link removed])
Follow the Fraser Institute on Twitter ([link removed]), Facebook ([link removed]) and YouTube ([link removed])

Visit our new Essential Scholars website ([link removed])

++++++++++++++++++++++++

Suspending Democracy: Government Gets Unlimited Spending Authority for Six Months
By Niels Veldhuis, Jason Clemens and Bruce Pardy

On Wednesday morning, the government, with the unanimous consent of the Opposition parties (Conservatives, NDP, Green Party and Bloc Québécois), passed legislation giving sweeping powers to Finance Minister Bill Morneau, including the power to unilaterally spend and borrow without parliamentary approval until September 2020. While the original legislation was revised ([link removed]), removing the ability to change taxes unilaterally, it remains an affront to Parliament and the separation of powers on which the Canadian system of government is built. 

Indeed, Bill C-13 ([link removed]),An Act respecting certain measures in response to COVID-19,grants the federal health and finance ministers the power to spend “all money required to do anything in relation to that public health event of national concern.” While the Liberals agreed to accountability measures including an undertaking that the minister provide to the Commons Standing Committee on Finance a biweekly report on all actions undertaken under certain parts of the Act, these measures fall short of requiring Commons approval for spending measures.

And while the ability to impose taxes unilaterally and without parliamentary approval was removed from the original legislation, the government still has the unilateral ability to borrow. Government borrowing today leads to the need to tax tomorrow. Put simply, the government now has the power to control the budget by increasing indebtedness, thereby increasing the need to pass new taxes in the future.

The new legislation ([link removed]) provides that spending may include (1) the purchase of medical supplies, (2) assistance to the provinces for safety and emergency response needs, (3) providing income support and (4) funding public health-related programs or covering expenses incurred by federal departments and agencies.

While this list might appear to limit or at least provide guidelines for the government’s spending powers, in reality, these categories cover the entirety of the federal government’s $340 billion budget, which for 2020-21 consists of $106 billion in “Major transfer to persons,” $80 billion in “Major transfers to other levels of government” and $154 billion in “Direct program expenses” (i.e. departments and agencies).

The question for Canadians, particularly those concerned by the original proposal, is—how is the revised legislation effectively different from the original bill? The timeline for this unprecedented authority granted to the government, a minority government ([link removed]) no less, has been reduced to six months. Beyond the shortening of the timeline (from the end of 2021 to September 2020) and the addition of reporting requirements, however, the suspension of Parliamentary oversight of spending and borrowing remains.

Six months ago, the Canadian electorate decided the Liberals should not have a majority government. Their minority status requires them to work with Opposition parties to pass legislation. It’s unfortunate the Liberals have used a health pandemic to give themselves powers Canadians didn’t vote for and the Liberals have not earned. And equally unfortunate that the Conservatives, NDP, Green Party and Bloc Québécois have acquiesced.

The COVID-19 bill effectively eliminates the need for all parties to work together to pass spending legislation for the next six months. Removing Parliament’s role in overseeing spending and borrowing will not bring our country together to solve the problems now ailing the Canadian economy.

Niels Veldhuis and Jason Clemens are economists with the Fraser Institute. Bruce Pardy is a professor of law at Queen’s University and frequent contributor to Fraser Institute legal work.













If you do not wish to receive future emails from Fraser Institute, go to:
[link removed] (click here to opt-out)

Fraser Institute | 4th Fl- 1770 Burrard St | Vancouver | BC | V6J 3G7 | CA | 604-688-0221

Powered by Cvent