Sep 23, 2020

'An ambitious plan': Reaction to the government’s throne speech

Arturo Chang, BNN Bloomberg

Gov.Gen. Julie Payette, middle, looks on with Chief of Defence Staff Jonathan Vance, left, and Prime Minister Justin Trudeau as the Usher of the Black Rod Greg Peters leaves to summon the House of Commons to come listen to the throne speech in the Senate chamber in Ottawa on Wednesday, Sept. 23, 2020. , THE CANADIAN PRESS/Adrian Wyld

Justin Trudeau’s Liberals unveiled Wednesday a new roadmap on how they intend to support Canadians amid the COVID-19 pandemic, stating the government will do “whatever it takes” to support workers and businesses as the crisis continues. Governor General Julie Payette resumed Parliament by delivering the federal government's throne speech, outlining how Ottawa plans to continue tackling the pandemic and its effects on the economy. Here's how some BNN Bloomberg guests reacted to the speech:

Wage subsidy extension an 'admission to how frail the Canadian economy is': James Moore

James Moore, senior business advisor at Dentons and former minister of industry, joins BNN Bloomberg to provide his perspective on the throne speech and why he believes the federal government is "treading water".

“The fact that the wage subsidy is going to be extended through the end of summer 2021, a full calendar from right now, is a remarkable admission from the government about the frailty of the Canadian economy, particularly from the bottom quarter of the Canadian workforce and their need for that subsidy.

“I think some businesses who have been relying on [the wage subsidy] as a stopgap to make decisions about how they’re going to address the future dynamic of their business in the new digital ‘stay-at-home’ world are going to have a year to figure that out, but it’s going to come at an enormous cost for the government of Canada and there’s no clear pathway forward in terms of what’s beyond that.”

-James Moore, senior business advisor at Dentons and former federal industry minister

'I don't see any room for tax hikes next year': CFIB CEO

Dan Kelly, president and CEO of the CFIB, joins BNN Bloomberg to provide his perspective on the throne speech and notes the importance of the decision to extend business wage subsidies.

“There’s a lot to like in the throne speech, as it keeps it focus on COVID and COVID economic support for small and medium-sized companies. The extension of the wage subsidy is a big one … We just put out a release this week that showed sales in small businesses are not expected to be back to normal for a year and a half, so that is good news. Also, using the Canada Emergency Business Account (CEBA) program to cover fixed costs could also be very helpful for small and medium-sized firms.”

-Dan Kelly, president and CEO of Canadian Federation Of Independent Business

Fixed income investors should start focusing on total returns over yields: Marret Asset Management CEO

Paul Sandhu, president and CEO of Marret Asset Management, joins BNN Bloomberg for his outlook on the throne speech. He also discusses why fixed income investors should opt for an active management approach and focus on total returns instead of yield, as rates near zero.

“The government told you two things pretty decisively: There's not going to be any austerity and they're going to use the full fiscal power of the federal government to do whatever it takes to fight the pandemic as well as some of the longer-term structural problems that have been revealed as a result of the pandemic. So lots of extra spending … I counted about 12 different spending measures in the throne speech that are additions to current programs or additional new programs. I only saw one or two revenue measures, so I would suspect that the deficit is going to increase again quite substantially.

“My rough back-of-the-envelope estimate just based on the programs that are going to be continued to be added and that after will have to be continue, is probably about at least a $200 to $250 billion addition to the deficit we already have, which was $340 billion higher in July.”

- Paul Sandhu, president and CEO of Marret Asset Management

The governments plan laid out in throne speech is 'very ambitious': Elliot Hughes

Elliot Hughes, senior advisor at Summa Strategies and former tax policy advisor to former Finance Minister Bill Morneau provides his reaction to the government's throne speech saying it is a "very ambitious" plan.

“The [throne speech] focus is squarely on the emergency and the crisis we find ourselves in, with a little bit of some hints on some longer-term plays and filling in some of the gaps that the pandemic has exposed. So they've made it clear that they’re willing to go to the wall in terms of spending to make it through the other side, which I’m sure concerns some folks, but I guess the question would be what's the alternative to that? Would it be allowing businesses to go under, allowing Canadians to go on unemployment? So they’ve made their pitch. The Conservatives have come out saying there was not enough in there for them to support it, so we'll have to see how the other parties go, but it was an ambitious plan laid out today by the government.”

- Elliot Hughes, senior advisor, Summa Strategies

'The real missing piece' to economic recovery is childcare: Economist Armine Yalnizyan

Armine Yalnizyan, economist and fellow on the future of workers at the Atkinson Foundation, joins BNN Bloomberg to provide her thoughts on the throne speech and why she believes more urgency is needed behind social and childcare support.

“The real missing piece is childcare and the reason for that is that unlike public education, childcare is viewed as a market choice and is largely delivered as a business … Unless we actually step in with some muscular action from the federal government to prevent further cratering of this vital social structure, we’re in real trouble. We’re looking at a prolonged and deepened economic recession. Forget about further recovery, we’re talking about stalling out on recovery and reversing course.”

- Armine Yalnizyan, economist and fellow on the future of workers, Atkinson Foundation