Op-Eds

Comme dans la parabole bouddhiste, on examine souvent la dette publique tels les six aveugles qui tâtent différents bouts de l’éléphant et qui tentent de se faire une idée de la bête. Or, en renonçant à l’aveuglement volontaire des idées préconçues, on peut se faire une idée plus complète des finances publiques, mises à mal par la pandémie.

J’avais particulièrement hâte d’examiner mercredi les derniers chiffres du Fonds monétaire international (FMI) sur l’endettement des pays, mesuré de manière assez comparable, quelle que soit leur répartition des responsabilités entre les niveaux de gouvernement.

On y constate que la dette brute du Canada, incluant toutes les administrations publiques, a bondi de 23,1 % du PIB en raison…

Les banques centrales s’approchent du dangereux passage entre Charybde et Scylla, les monstres marins de la mythologie grecque qui menaçaient les navires. Sauf que les écueils d’une faible croissance et de l’inflation sont bien réels.

La relance économique est enclenchée. Le Québec, pour l’un, a retrouvé son niveau de PIB d’avant pandémie dès mars. Mais ici comme ailleurs, cette reprise est encore mal assurée et inégale, comme on le voit dans les services livrés en proximité avec la clientèle.

L’inflation est manifeste, provoquée en grande partie par la perturbation des chaînes d’approvisionnement mondiales causée par la COVID-19, ce qui suggère qu’elle serait transitoire. Mais si les goulots d’étranglement persistent, ce…

As the Liberal government in Ottawa starts ramping up for the big celebrations October 19th of Prime Minister Justin Trudeau’s 20 years in power, fiscal storm clouds loom. A gradual but modest rise in interest rates, the continuation of a decade and a half of slow economic growth and several supply and demand shocks have laid bare the unsustainability of Canada’s public finances. Now, as autumn 2035 approaches, we face what is clearly turning into a fiscal crisis.

What got us here? The easy answer is the economic and fiscal impact of the COVID-19 pandemic that wreaked havoc on the economy and public finances in 2020 and 2021. The federal and many provincial governments saw the ratio of their net debt to their GDP jump 20…

Surging transfer payments financed by unprecedented borrowing have dominated the fiscal headlines since the spring of 2020. By contrast, the sharp run-up in Ottawa’s operating costs since 2014 has hardly registered. As the pandemic recedes and its fiscal aftermath comes to dominate policy discussions, Ottawa’s burgeoning overhead — mainly due to compensation — will come under close scrutiny. As in the proverb, after seven fat years, seven lean years loom.

If not for the distraction of the pandemic, which allowed the government to get away with not presenting a budget in 2020, Ottawa’s surging operating and employment costs would have attracted attention by now. In the 2014/15 fiscal year, federal expenses other than transfer…

Governments in the advanced economies mounted a massive fiscal response to the COVID crisis. They ramped up spending, mainly on income supports to individuals and businesses, and financed it by borrowing. Central banks also responded on a massive scale. They dropped their policy interest rates close to zero, and their balance sheets ballooned as they bought securities — mainly government debt — and flooded the global financial system with liquidity.

These responses undoubtedly cushioned the COVID blow to our economies. But, more than a year later, especially in the United States and Canada, both fiscal and monetary policy are still in overdrive. It is reasonable to worry that they are going too far.

On the fiscal side, the…