Time to wait out the COVID-19 storm

These are strange times, so maybe it’s time for a little perspective. Consider this social media meme floating about:

“Our grandparents were asked to go to war. We are being asked to stay home and sit on the couch. We can do this.”

article continues below

A couple weeks ago many of you likely thought such notes were ridiculous, but you don’t likely think that way now.

And even those of you who are still unconvinced that the precautionary measures taken to deal with COVID-19 _ the Coronavirus, that’s now been declared by the World Health Organization (WHO) as global pandemic _ are necessary surely must acknowledge that things have dramatically changed.

Last week,the Saskatchewan Party government was supposed to be presenting its annual budget. Instead, we told we were getting a half budget of spending estimates for the 2020-21 fiscal year, without any revenue projections.

In the end, we didn’t even get really get that, although Finance Minister Donna Harpauer didn’t even get a chance to really even that in the legislative assembly that quickly adjourned because of a doubling presumptive COVID-19 cases to 16.

She did, however get to hold a press conference outlining for $14.15 billion in spending in the next year _ spending with no clue as to how we are going to pay for it all.

Normally, such a move by any government would rightly be a source of outrage _ especially in an election year and especially when government spending practices were being called into question long before COVID-19.

About all the Harpauer is “we have a strong cash position of $1.3 billion, so we well positioned to manage through this challenging time.” That, too, is a highly questionable at this point.

What the estimates do show is government spending has increased 3.1 per cent from last year because of things like $2.7 billion in capital investment by the Crown Corporations and the rest of government and $5.77 billion for health care that’s $211 million or 3.8 per cent more than last year.

Pandemic crisis or not, the government is significantly increasing its spending _ something that many can legitimately argue is a good thing.

We will not only need more hospital resources to fight COVID-19 but also economic stimulus to deal with the reality that this outbreak is simply causing a lot of people to sit at home and not spend money.

The other reality is that this means the government isn’t taking in as much money from key sources like sales, liquor and gaming taxes. Revenue from personal and corporate income tax will be way down (although the nature of collecting those taxes means the big hit will come in year’s provincial budget).

And we have already witnessed the crash in the stock market like nothing we’ve seen in eighty years, led by oil whose $22-US-a-barrel price is getting close to a third of what the budget would have normally expected.

This massive loss of revenue combined with that 3.1-per-cent increase in spending could very easily chase this year’s deficit past a billion dollars to numbers unseen since the last time the Saskatchewan government failed to pass a budget in 1991.

These are certainly scary prospects for a province that’s quite enjoyed its last 15 years of growth and has no interest in returning to bad old days.

But rather than panic, the best answer for us is to simply sit quietly at home and ride it out.

Yes, last week’s closure of schools, casinos, limitations of visits to nursing homes and official implementation of the ban on gatherings of more than 250 people (now, including churches) makes for scary prospects.

But if we calmly ride this out and stop the spread of COVID-19, we’ll get through this.

Our people have been through worse.

© Copyright Carlyle Observer

Comments

NOTE: To post a comment you must have an account with at least one of the following services: Disqus, Facebook, Twitter, Google+ You may then login using your account credentials for that service. If you do not already have an account you may register a new profile with Disqus by first clicking the "Post as" button and then the link: "Don't have one? Register a new profile".

The Carlyle Observer welcomes your opinions and comments. We do not allow personal attacks, offensive language or unsubstantiated allegations. We reserve the right to edit comments for length, style, legality and taste and reproduce them in print, electronic or otherwise. For further information, please contact the editor or publisher, or see our Terms and Conditions.

comments powered by Disqus