Canada, like many developed countries, is currently closed for business. Prime Minister Trudeau’s $82 billion COVID-19 Economic Response Plan to “help stabilize the economy”, representing more than 3% of national GDP, includes $55 billion in tax deferrals for businesses. The Trudeau government however, has failed to explain where the money will be coming from. While taxpayers will obviously be expected to pony up, taxes are derived from income. Unemployment is rapidly soaring as businesses are forced to close. Hundreds of thousands of Canadians are losing their jobs. According to a report by The Conference Board of Canada, more than 330,000 taxpayers could lose their jobs during the second and third quarters this year, hiking unemployment to 7.7%. GDP is expected to decrease by 1.1% in 2020, further inflating the aid package.
Tax deferrals implies profits, which require revenue. No revenue = no profits = no taxes. Without revenue, tax deferrals will not keep businesses solvent. Businesses are going out of business, now.
Lending some objectivity to the magnitude of cost involved, the Liberal $82B bailout package exceeds the total value of Canada’s crude oil exports ($80.56B) in 2018. Mr. Trudeau will have to sell a lot of non-environmentally-friendly fossil fuels to pay for all this, not to mention the yet-to-be-tabulated economic devastation which looms currently just over the pandemic horizon beyond Parliament Hill.
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