The Bridge with Peter Mansbridge - Did That Budget Change My Life?

Episode Date: April 20, 2021

A massive budget full of facts, figures and new policies.  Did it change your life.  My friend personal financial advisor Preet Banerjee gives his take. And on COVID, Dr Lisa Barrett gives us the Atlantic Canada take on the third wave.

Hello there, Peter Mansbridge here. You are just moments away from the latest episode of The Bridge, where we're going to break down some of the top issues of the day with two of my favorite guests. Like you, I have been so grateful and so thankful for frontline workers during the COVID crisis. Let's just talk about the frontline workers at SickKids, which is one of the world's best children's hospitals. SickKids doctors also is one of the world's best children's hospitals. SickKids doctors also work behind the scenes on incredible breakthroughs to help our kids and generations to come.

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So Sick Kids VS. You'll be amazed at what you learn. and hello there i remember the day that i covered my first budget federal budget it was march of 1977 i had just got to ot Ottawa a few months before in late 1976. And I'd come in from Saskatchewan where I covered, you know, potash and Alan Blakeney and a variety of things that were very kind of Western in nature and rural in nature and agricultural based. And I wasn't confronted with the big numbers of a federal budget, and I would have no idea what to do with them. And then suddenly there I was as a parliamentary correspondent in Ottawa

and was expected to cover things like that, not at the front lines of our coverage, but certainly not far back in preparation for the days where I guess they assumed that I might be covering these from the front lines. But quite frankly, I didn't know what I was doing. I didn't understand budgets. I didn't understand numbers. I didn't understand numbers. I didn't understand all the things that were front of center at that time, and they really were front of center. You know, the deficit was starting to grow,

or at least we thought it was in those days' numbers. It was like $8, $9, $10 billion a year, where five years before that, when John Turner had been finance minister, the budget was basically break-even. Then it started to come up $1 or $2 billion a year. I look back at those numbers now, don't we, and we kind of laugh. Yesterday's federal budget dropped a number well over $100 billion. And a national debt accumulating to well over a trillion dollars. So, rewind to March 1977.

The finance minister that day was Donald McDonald, somebody who was highly respected and seen as a potential future leader if Pierre Trudeau ever stepped down. So Donald McDonald comes in in 1977 with his budget and it includes wage and price controls, something the liberals, Donald McDonald and Pierre Trudeau included, had campaigned vigorously against just a few years before. In 1974, Robert Stanfield, a conservative leader, was advocating wage and price controls. The Liberals made fun of him, and the Liberals won a majority government.

And here they were three years later doing exactly the same thing, introducing wage and price controls to try and combat inflation. So, I was part of the press team, the media team from the CBC that went into what's called a lock-up, where you sit with finance officials for the day, waiting for the budget to be released. You can't go anywhere. You can't talk to anybody.

You can only be, you know, you can ask questions of these officials. You can go to briefings within the lockup. But I'm telling you, most of this stuff was flying over my head, as it continues to do in budgets into the future. So whenever I hear budget day, I get all kind of squirmy thinking oh my gosh I'm never going to understand this stuff yesterday's budget was huge I mean just the budget book that they handed out was over 700 pages long now really do you think any of the media representatives were able to read that whole book? Certainly go through some of the key parts, read some of those graphs,

and come away. I'm always amazed at some of the men and women of the Canadian press gallery who are called upon to immediately say, okay, what was in it? And they sort of rattle off all this stuff like they'd been working on it for weeks. Anyway, yesterday was that kind of day. And so by the end of the night, my mind was in blur. What would all those numbers mean? What do they mean to the average person? Well, when I ask that question of anything financial,

my mind always goes to one person who's helped me on many an occasion and agreed to help me again on this day. And that's Preet Banerjee. He's a personal financial advisor. And he's a television host. He's a commentator, an analyst. He's really good. And Preet and I have been friends for, I don't know, more than a few years. We used to do a lot of stuff together on the CBC.

And when I called him up and asked him, hey, can you help me out on this? We'll try and talk about it in, you know, as close as we can to the everyday person on what some of these things mean that we witnessed last night and how they, in fact, can affect us. And he said, absolutely. And here's the product of that invite. Preet Banerjee. So, Preet, I guess the common thing that I've heard in every budget commentary so far has been,

there's something in this for everyone. Is there really? Is there something in this for everyone? Yeah, technically, I think you could say that because, you know, with the 740 pages or whatever this budget is, it's massive. So you would expect that it speaks to a whole bunch of people. But the magnitude of some of these initiatives may not sort of be in line with saying there's something for everybody. I think the two sort of legacies of this budget will probably be the national child care program and the debt, because there's a lot of spending that's going on in this budget. And that spending will end at some point it has to and so if you take a look at the level of the deficit last year the deficit for the upcoming year is about half of that which is still

you know like 140 billion dollars or i forget what the exact number is but to put into perspective you know the child care program and the level of pandemic spending that is required to get us through what's happening right now. The national child care program is looking at about eight point three billion dollars once it's up and running per year. That's like six weeks of queues. The Canada emergency wage subsidy, that six weeks of the wage subsidy is the annual cost of child care once it's up and fully running. So that gives you a sense of the magnitude of the wage subsidy is the annual cost of child care once it's up and fully running. So that gives you a sense of the magnitude of the pandemic supports and just how huge these are compared to the next biggest ticket item, you know, the child care program, which if there

was no pandemic budget and there was no pandemic and you announced this program, you say, wow, this is a big program, but it is dwarfed by the size of the pandemic supports. That's really interesting when you look at it that way. Now, I think as individuals, you kind of get the child care program in the sense of what it could mean for you, if your kids are at the right age to benefit from it. But I want to talk about these debt numbers for a minute and try to understand why, if at all, as an individual, I should be concerned about that.

Because when you first of all look at the graphs in terms of the deficit number, the amount over budget they're going to be each year for the next five years, you look at that and it's progressively smaller each time. You figure, okay, that's good. They're projecting they're projecting they're going to have things under control but when you look at the debt the accumulated deficits of now in the past it's huge it's like one and a half you know trillion dollars it's going to be now why should i care about that or should i i mean this is the age-old debate right you're

going to hand this down to your grandchildren etc et cetera, et cetera. But how is it going to affect my life? Yeah, it's a great question. I think if we go back to the last time that the debt was such a big number, we're talking late 80s, early 90s is when it became an issue. Now, interest rates were a lot higher back then. And the cost of servicing the debt back then was so big that the credit rating agencies around the world were saying, you guys have got a big problem. And what happened shortly after that? Big cuts, right? Big cuts to spending. So we're kind of priced for perfection in a way. And I think there's some parallels to the housing market in a sense. People have wondered how have house prices been able to get so high when people's

incomes have basically not changed. It's because the cost of servicing debt is so much lower. Now, it's brought up a whole bunch of different problems in and of itself. But it's the same thing with the federal debt. The cost of servicing this huge amount of debt that we have is actually quite manageable right now. And that's given them a bit of leeway to make sort of these big expenditure promises and to have these pandemic support programs that are so large. But at some point, that's going to end. And the projections rely on some pretty strong growth rates. Now, we've heard for decades now that one of the biggest problems and threats to the Canadian economy

is the level of indebtedness of the individual, right? They're on a razor's edge. And so if interest rates go up for a consumer who is mortgaged to the hilt and has just got into home ownership because prices are so high, if anything happens happens to them it's a big problem and if interest rates were to go up too fast it could destabilize the economy and then what do you do so at some point you're going to have to take care of this issue and right now it looks like the projections are saying growth is

the way that we're going to fix this. I hope that's right. But if anything happens between now and getting back to some semblance of balance, what do you do at that point? Growth can also lead to inflation. Yeah, absolutely. There are some clearly economists, especially in the States, who are worried about that. Yes. And that can also, you know, portend some big problems for the economy as well. And so that's one of the reasons why attention is being focused on, okay, you've gotten rid of the fiscal anchor and you're using guardrails for the time being, what is the new fiscal anchor going to be? Because you've said you're going to go back to some kind of fiscal anchor. And so that might

end up being instead of debt to GDP, they might use some other measure, which is more closely related to the ability to service the debt. Does that mean that we're going to have forever these massive debts that don't get as small as we would like them to be in a short period of time i think that is going to be the normal the normal for the next little while but certainly there are going to be a lot of people are saying we need to start cutting some of these programs that we're we're spending a lot of money on in order to accelerate that trajectory. So that's why it's important to keep an eye on the total level of debt that's there, because at some

point, if you don't, and if interest rates go up, if you have inflation, there's going to be some people saying we need to do something drastic in the other direction. And that's very painful. Last question. It is a minority government. The budget is a proposal. It's got to be passed and then it's got to be implemented. And these things take time. Assuming all of that happens, how has our lives, how have our lives changed as a result of this budget? Well, I think this budget may not necessarily, you're not going to feel something different tomorrow or even if the budget passes, which I'm pretty sure it's going to, because a lot of it is extending some of those big pandemic supports like the emergency wage subsidy, the individual income supports. And they're also being designed to taper off towards the end of the summer in September, October time range. And so I think this budget, again, was more about let's deal with this pandemic and the fact that we have these rotating lockdowns

and stay at home orders, which are throwing small businesses and all businesses for a real loop this is designed to get us to that time in the year where hopefully everyone is vaccinated as well and that's where the light at the end of the tunnel is because remember the other thing that the bank of canada said is that on average every canadian has about 5800 in pandemic savings because while there certainly have been a lot of people who have been hurt, they tended to be on the lower end of the income spectrum. But there are people who are more in the knowledge economy, who haven't lost their income, they've been able to work from home, but they have lost the ability to spend money like they did

before on travel and entertainment and other things. So they're actually sitting on a lot of money. And so the hope is if you can just get to that point where they can unleash these pandemic savings, you might actually see quite a boost to the economy. But I see this budget as more of the same basically for the rest of this year. And we're just waiting to get to the end of all of this. And I don't even know if you can actually put a a flag in the ground to say here we we've come to the end of the tunnel i think it's going to be very diffuse well as long as we get to there yeah yeah i'm at my wits end yeah aren't we all listen preet it's been great to talk to you again thanks so much for doing this always a pleasure peter preet banerjee and it is always a pleasure, Peter. Preet Banerjee. And it is always a pleasure, an absolute treat to be able to chat with Preet again.

I love that thing he brought up near the end, your pandemic savings. How about you guys? Have you all got like pandemic savings? Have you got all kinds of money in your bank account that any other year you wouldn't have because you didn't spend it in the last year you know i'll be honest i've got a i've got a few bucks more than i probably would have if the pandemic wasn't on it may not be as much as preet was talking about but it is savings in a sense i mean the biggest thing i've noticed the biggest change i've noticed and you know i think i'll bring preet back in the next you know, couple of weeks to talk about this, and that is the fact that we just, you know, a lot of us just don't use cash anymore at all. I mean,

listen, the cashless society and all that stuff has been around for decades, but this past year, I know in my own case, I've still got the coins I had in my pocket the day this all started in mid-March last year. They're not in my pocket anymore. They're sitting on my desk, but I haven't touched them in a year. And it's the same with cash, I carry one of those small kind of folders that hold some credit cards and usually a number of bills, cash. And I've still got the same, the exact same $20 bill in that little folder that I had a year ago. Never taken it out for anything.

I've used plastic or e-transfers or what have you. Haven't used cash. And I can't see that I'm going to start suddenly using it again. I don't know where I'd use it. Just don't use cash anymore. And how will that change our lives? Or will it? Preet's a personal financial advisor. I'm sure he can answer that question. And, you know, maybe we'll bring him back and talk about that soon. On the politics of the budget,

you notice, obviously, that I did not discuss that during that conversation. And saving that, first of all, Preet is much more valuable on the kind of things that he did talk about. On the politics, obviously, Bruce will get into this in some fashion. We haven't decided exactly how. Tomorrow on Smoke, Mirrors, and the Truth,

budget days are always great for smoke and mirrors and discussing the truth whether it's on the part of the government or the opposition parties it's always a field day of of discussion points and i'm sure we'll have some of them tomorrow um so keep that in mind but next up when when we come back from a little break here, we're going to get back on COVID with another one of my favorite guests, Dr. Lisa Barrett from Halifax. That's when we come back.

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Okay, so yesterday was quite the day. The last three or four days, especially here in Ontario, and to some degree in Alberta, and to some degree in BC, all been fighting the third wave, affecting all three provinces in different ways, but definitely affecting them. And it's not a pretty picture, and it's especially not pretty in central Canada, in Ontario.

Not so bad in Quebec. Their number is, you know, about a quarter of the number of new cases in Quebec, as opposed to Ontario, who keep seeing their numbers, you know, over 4,000 a day. And you look at the big picture of the country and the way it breaks down province by province, and you keep seeing, as we've seen for the last year, this, you know, kind of, I was going to say wasteland. That's not the way to describe it. But if you're looking for numbers, you're not going to find them in Atlanta, Canada. They've done this incredible job of dealing with COVID, with their protocols, with the compliance of the people. Their numbers continue to be very low. Like in Nova Scotia yesterday, there were 15 new cases, one five.

And people are going, oh my gosh, 15 new cases. That's terrible. In Ontario, there were 4,400. 15. Properly handled is manageable, right? 15 on the basis of what we've witnessed in the last year in Atlanta, Canada, and in Nova Scotia in particular, that 15 is not going to suddenly go up to 4,400 or 440 or even 44.

They seem to have things really under control. So after yesterday's discussion with Isaac Bogoch, Dr. Isaac Bogoch, University of Toronto, about the absolute basket case that Ontario has turned into, I wanted to, you know, keep our, you know, we've done, I think, a good job of going around the country and talking to different infectious disease specialists in different parts of the country about what they're facing, but also their take on the overall picture for the country. So I wanted to talk to our friend, Dr. Lisa Barrett in Halifax.

She's a clinician scientist, Division of Infectious Diseases, Nova Scotia Health Authority, assistant prof at Dalhousie University. Yeah, I mean, she ticks off a lot of boxes in that area of expertise on this issue. So I wanted to talk to her about kind of where we are and to try and put some of all this in perspective. So here's that conversation. All right, Dr. Barrett, you're going to have to help me out here because here I am sitting in the middle of crazy town

or crazy province or whatever you want to call it. I mean, Ontario, like Alberta and BCc to a good degree it's been really rough and it's hard to keep things in perspective so we go to calm nova scotia in the middle of calm atlantic canada for that kind of help you know help me keep in perspective what's going on right now. Well, I wouldn't take away too much from that feeling that there's a lot of chaos because there is. And I think that's real. And I think that's not just a perception. That's reality. So I wouldn't whitewash that part away um this wasn't something that came on overnight if we look back and we look at the cases or the people infected i prefer to call it so we don't forget that each one of these uh cases as a human being this this came on slowly um predicted people said it um and then that uh the 117 variant really settled in and took off

and now you've got a big problem in ontario and other provinces that was fueled by a distinct lack of direct and rapid intervention and the ability to keep people who needed to stay at home, staying home and supported. You know, I think people look around and say, well, the vaccine should be going faster. This wouldn't have happened. Not quite true. You can't vaccinate your way out of a variant uptick. You have to do both things at the same time. So that chaos is a firm and direct result of delayed and partial interventions against a virus that we can see in the rest of the world how it worked. In addition to having a little bit of a slow uptake of vaccine, but that's not really the issue. And now trying to get the vaccine out to the right places.

And there's no one easy right answer on that. So where are you? You're in the middle, right? You're in the middle of a very big, very large wave that is doing exactly what we said wasn't gonna happen in Canada, which is overwhelm health systems. And that's a distinct stepwise

process that the rest of us watched and talked about and hoped we wouldn't end up watching over the last two months and didn't have to happen. I firmly believe this is completely avoidable in a country like Canada. You know, one of the ways that they, the whoever that they are, are trying to keep us focused and confident that this is all going to end at some point is telling us that this is kind of the final battle. You know, if we can get through this third wave, better times are ahead for the summer because it's summer because of vaccines because of whatever um it's not really the case i mean there's a number after three and it's four i mean could there be a fourth wave i mean what why are we kind of assuming that this is the final stand? So I'm not certain that everyone is.

I will say there's an incredible amount of positive intervention happening in the worst hit provinces, which I'm grateful to see. Hopefully that continues a little further. So, yeah, outside activity, temperatures that won't literally kill you if you're outside for an extended period of time, whether you're housed or under housed. Those are all great and important interventions, particularly when you're just still waiting to get that herd immunity thing going. And we seem to have caught on at least for a little while as to how to bring these cases down. In combination with vaccine, outdoorism, it does look like things are going to get better over the summer.

I don't know that we're entirely into a situation where I wouldn't expect to see more cases increasing again over time. It's a virus. This is a biologic process. And I think we should expect that things will, there will be more cases that will show up again. Our vaccines are probably going to have to be tweaked over time. But the one thing that we do know if we can learn from it is what does work. So if you can get out of this, if you can get out of a state of, that's what I would call a state of emergency that's now become a state of catastrophe, which you can, and you're going to. Learn the lessons though, so that when we go into the next set of cases that may show up, we need to not give any province, no matter who's leading it,

the opportunity to allow this to happen again. And I say that without any patriotic overtones or angst or anger, because I think we should just be able to make sure that we've got federal guidelines around four or five numbers that say, do not pass go, do not collect $200. If you reach these numbers as a province, you're going to do something differently. And I'm very much hoping that that's something that we're all going to learn very soon to prevent the waves of four from becoming catastrophe four. You know, we've talked about this before about Atlantic Canada and how it seemed to weather the storm, not just seem, has weathered the storm much better than anybody else, kind of wave after wave, and they seem to be doing the same thing again now there also seems to be in atlanta

canada less of a hesitancy about uh vaccines and astrazeneca in particular than there is elsewhere and i don't want to overstate the hesitancy thing but there's no doubt there is some of it in the rest of canada but atlanta canada to be, you know, handling all this in a very different way than everybody else. Can you try once again to explain that? I think I'd be remiss in saying that there's not a stoicism that hangs out in Atlantic Canada and always has from one accord to the next or one premier saying this is what you all are going to do in Newfoundland and everybody just goes yeah yeah I suppose that's the right way to do this there is a certain stoicism that for better or

for worse exists but I also think and and I can't sell this short there's been consistent and firm and limited numbers of people providing messaging. And people have had some trust. And they've been definitive and haven't always been popular for a moment or two, whether that's the premier or the chief public health officers in each province. But they've been consistent, direct, firm. And and together they made very similar decisions as well i think there's some solidarity there but they basically like they didn't they didn't mess around with the basics of pandemic management tests trace quarantine and when you got a vaccine tell people what it is tell them they should get it and explain why you're pausing or doing something in very clear language um it'll be interesting to see what they

do next with the astrazeneca but whatever it is i suspect people are going to take it because they will see that there's a lot of benefit for them and the people around them. So that's a long winded answer to say, I think it's a lot about the people, a chunk about the leadership. to some basic bits that still parts of Canada can't seem to get their head around in terms of just adhering to. And the vaccine part, well, we haven't always had a lot of options in terms of vaccines in Atlantic Canada. Most of the time, it's whatever vaccine is chosen by our province and people take it anyway. So it's a foreign concept, as it is for most people, to actually have a choice or a perceived choice, I'll put it that way, of vaccines. So people are just like, oh, yeah, I'm going to get my shot.

No jabbing here. It's the shot. And they just do it. Good for you. I don't like jabbing either. It sounds crazy. Shot sounds better. Okay, listen, leave us with a story a good story

um something must have happened to you on your rounds at uh at the hospital or with your patients or you must have seen something or heard something from from one of these people that you deal with every day that that either left a smile on your face or left you feeling confident about the future in some fashion. Have you got a story you can share with us? Oh, my life is filled with these amazing human beings, these patient types and people I help look after. Two days ago, I was doing some rounds.

We were in at the hospital and there was a person who was looking after some patients who happened to be COVID positive. And they were talking about their vaccination and their mother and their family. And they said that they had all sat down and they were talking about their vaccination and their mother and their family. And they said that they had all sat down and they were talking about this COVID with their family around their family table. And so this is not a traditional multigenerational family, but it is the Atlantic Canadian multigenerational family. Grandparents, parents. One of the parents is a person who travels into and out of the province for rotational work and a health care worker along with their kids.

And only one of the people at that table was vaccinated and the grandparents were about to get vaccinated. And the conversation came up around, you know, what was going to happen? Were they going to get the AstraZeneca and what they were going to do about it? And the comment was made, well, whatever happens, we're going to do it fast because this is not about us. And then one of the kids who was seven, she told me, said, it's a real story. She said her little child looked up at her and said, but mommy,

when can I help too? When can I get the vaccine? And I thought, I'm sure that conversation happens a lot. But I thought, wow, three generations right there, people at high risk to get COVID, at high risk to spread COVID, and for very bad things in many cases. And here they are trying to figure out and their youngest generation that's coming up is trying to figure out when they can help too. And so I think a lot of Canadians think like that. And I think that's gonna be a go forward for us.

Vaccines won't get us at a disaster time. Only hard work will do that. But when you've got kids at seven starting to ask how they can help, you know, you're setting yourself up for a good next generation, I think. So that was hopeful to me. Yeah, hopeful to me too. And a great story. Dr. Barrett, as always, thanks so much. Thank you. Out of the mouths of babes, right? Great little story. And thanks once again to Dr. Lisa Barrett in Halifax and for all her words of wisdom and her sense of kind of where we are and placing the Atlantic Canada

experience in that bubble set against the challenges that are taking place in other parts of the country. Obviously, we will continue to focus on this story and the others in the days ahead. Tomorrow, as I mentioned earlier, is Smoke Mirrors and the Truth. Bruce Anderson will join us, as he always does, and we'll see what's on his mind. You know, I imagine there'll be a little bit of budget talk. There's the big climate summit coming up at the end of this week.

That's important to think about as well. And whatever else may be on his mind, the whole Ontario thing has been quite something to watch unfold over the last four or five days. And, you know, it has come at some price on Doug Ford. We've seen the latest numbers and polls that have come out, research analysis on his handling of the situation, and it's not good.

It's not good at all. So these are the moments where leadership is challenged in terms of what that leadership does to try and dig themselves out of the hole they're in. So let's see whether Bruce has some thoughts on that as well tomorrow. Anyway, that gives us our exit signal for this day on the bridge. I'm Peter Mansbridge. Thanks so much for listening.

And you know what? I'll talk to you again in 24 hours.