#onpoli newsletter: Budgeting during a time of COVID-19

By TVO Current Affairs - Published on Mar 25, 2020
Doug Ford addressing the media. (Frank Gunn/CP)

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Normally at this time of year, political nerds (like our lovely newsletter writers Steve Paikin and John Michael McGrath) would be clamouring to find out what is being included in Ontario’s provincial budget, which comes out each spring.

However, like everything at the moment, that too has been touched by COVID-19. As the situation changes day by day, how do provinces budget for their financial future?

 John Michael and Steve discuss that in this edition of the #onpoli newsletter.

One week in

John Michael: Steve, by the time our readers get this email, it’s going to be officially one week since Premier Doug Ford declared a state of emergency. It feels more like a month ago at this point, but we’re all having to adopt a more flexible relationship with time these days. Except for the Ontario government, which does actually have a hard deadline coming up: they want to get a budget speech before the house before April 1. In part, this is because back in normal times they actually made it the law to do so — or the finance minister faces fines if he doesn’t. So this week, on Wednesday, we’re going to get a kinda-sorta budget: technically, it will be a “fiscal and economic update” like we normally get in the fall, with a much more limited set of economic projections. Because, reasonably enough, nobody has any idea what the economy is going to look like one month from now, much less three years from now.


When days feel like months

Steve: soooo agree with your observation that time seems particularly untrackable right now. This COVID-19 crisis feels as if it's been going on for months. And it surely is putting the staff at the Ministry of Finance to the test. Normally, they consult private-sector economists, then offer a fairly conservative forecast on where they expect the economy to go over the ensuing few years. That very much influences the economic-policy pronouncements that show up in any budget. That exercise feels kinda pointless right now. No one has a clue what kind of economic impact this crisis will have one month from now, let alone five years from now. I presume that was part of the thinking behind the Ontario NDP's announcement yesterday in which they offered the government some advice on how to help people's pocketbooks in the short term?


Andrea Horwath
Ontario NDP leader Andrea Horwath speaks during a press conference at Queen's Park. (CP/Frank Gunn)

John Michael: It certainly seems to have been. NDP leader Andrea Horwath made the NDP’s suggestions for Wednesday’s mini-budget public on Monday, having been told the government wanted opposition MPPs’ input by Sunday night. The NDP have a substantial list, at least some of which I suspect we’ll see in the final document: $1 billion in immediate “surge” money for hospitals, the province paying for 100 per cent of local public health funding, support for food banks and others in the non-profit sector, and more. The hardest one for the government to deliver on, however, is going to be Horwath’s request for $2,000 in immediate relief to Ontario households in need to cover their costs before the substantial amount of federal funding can start rolling out. It’s going to be hard both for the sum involved and the speed that she’s asking for: there are real limits on how quickly governments can push money out the door. That said, governments across Canada are getting pretty creative, so we’ll see.


We’ve been here before…

Steve: Of course, John Michael, this wouldn't be an #onpoli newsletter if we didn't get a bit nerdy here and point out this isn't the first time that a provincial budget has had to be postponed or altered. Some examples come immediately to mind. When Mike Harris’s Progressive Conservatives got elected in 1995, they essentially threw out all the financial plans that Bob Rae’s NDP government had introduced only a matter of weeks earlier. Harris was sworn in the last week of June, and three weeks later, finance minister Ernie Eves brought in an “instant budget” that cut spending by more than $2 billion. That was a pretty quick turnaround, as Finance Minister Rod Phillips’s financial statement on Wednesday will be. Then, when Ernie Eves was premier in 2003, he and his finance minister, Janet Ecker, essentially had to chuck everything they'd planned because SARS hit and all their financial projections were rendered immediately out of date. Governments obviously have to learn how to pivot quickly during urgent times. So we've been here before. 

John Michael: As you say, there’s some precedent for this. But some stuff is going to be all new. For starters, reporters won’t be in a traditional “lock-up” like we’ve done in previous budgets. Understandably, nobody wants a few dozen reporters and high-ranking public servants locked in a poorly-ventilated room at this moment in time. We don’t know exactly what the government is going to do to get the budget into our hands, nor do we know as I write this how much warning we’ll have, but we do know that Rod Phillips is scheduled to be standing up in the legislature sometime shortly after 4 p.m. on Wednesday, so people should keep their eyes on TVO.org and, perhaps, their podcast feeds.


Just a reminder...

Want to know more? Check out the latest episode of #onpoli, out today, for analysis of the province’s decision to close non-essential businesses. 
 
Have thoughts on the show? Tell us what you think at onpolitics@tvo.org 
 

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