EDITORIAL: Omicron overtakes Freeland's fiscal update

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Finance Minister Chrystia Freeland’s fall economic statement delivered Tuesday — virtually instead of in Parliament because two members of her staff have contracted COVID — was already outdated as she delivered it because of the Omicron variant.

The Trudeau Liberals had intended it as a good news announcement before events overtook them — for example that government revenues to date are up and thus the government’s projected deficit is down from $154.7 billion this year to $144.5 billion, freeing up $10 billion for more government programs.

But all that was buried by Prime Minister Justin Trudeau declaring Omicron “scary” and Freeland acknowledging in her fiscal update that Omicron has clouded the government’s previously rosy view of Canada’s post-pandemic economic recovery.

“Risks associated with COVID-19 continue to cloud the outlook” it warned.

“The recent resurgence of COVID-19 and the Omicron variant … pose a downside risk to Canada’s economic recovery.

“The global health situation remains fragile. Cases have been rising even in some countries with high vaccination rates (like Canada), which could lead to re-tightening in public health measures, notably in Europe. This could re-intensify global supply chain issues, adding to inflation risks and weighing on growth.”

As a result, “labour shortages could constrain economic activity more than anticipated, potentially limiting growth and prolonging inflationary pressures … Global supply chains will likely remain fragile for as long as the virus continues to spread … Moreover, the impact of B.C. flooding on critical transportation infrastructure and the flow of goods could put further pressure on supply chains in the near term, temporarily weighing on the recovery and increasing the prices of certain goods.”

All that is government-speak for the Trudeau Liberals admitting they don’t know what’s coming next, which means the numbers contained in Tuesday’s economic statement should be taken with a grain of salt.

It’s a far cry from Freeland’s optimistic economic statement of a year ago which boasted that the “seeds we have sown and will continue to plant in the weeks and months ahead — to protect Canadians’ health and save our jobs and businesses — will help us come roaring back from the coronavirus recession.”

But that was then and this is now and the prime minister and his finance minister aren’t sure of what’s next.