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Fourth-place election finisher, NDP Leader Jagmeet Singh, has said he may support the Liberals for the remaining three years of their mandate provided certain of his ideas are adopted, including paid sick leave and an extension of the CERB for furloughed workers. The Liberals, ever devoted to their own survival, are eager to comply. What could possibly go wrong? Well, a U.S. rating agency has the answer to that.
Last Friday, Fitch Ratings launched its third warning volley at the Liberal Titanic as it sails headlong toward its rendezvous with the fiscal iceberg. Like Leonardo DiCaprio in the eponymous Oscar-winning movie, Justin Trudeau stands at the ship’s bow as the wind blows through his flowing locks and shouts, “I’m the king of the world! Woo hoo hoo!” Not for long, maybe. (Speaking of DiCaprio and wind, Westerners will never forget the visit on which he confused a Calgary chinook with the “terrifying” effects of climate change.)
Fitch, which had earlier downgraded Canada bonds from “AAA,” warned that promises in the throne speech will raise the deficit and debt beyond its June estimates and that the debt-to-GDP ratio is already significantly higher than the median of its “AA”-rated peers. Moreover, “failure to set clear post-pandemic fiscal anchors and reduce the federal deficit to sustainable levels after the public health crisis could renew negative ratings pressure” — in other words, a debt downgrade. The latest additions to spending and debt are the extension of the Canada Emergency Wage Subsidy through to summer 2021, increases to small business emergency financing, long-term childcare support, a national pharmacare program and public investments to create green jobs and infrastructure.