Finance Minister Chrystia Freeland said last week that she is consulting with Prime Minister Justin Trudeau, government policy experts and business leaders on whether to end pandemic programs.A Canadian economist who has served as a social policy adviser to the federal government says Finance Minister Chrystia Freeland should ignore the business lobby’s advice to the contrary and shut down the federal wage subsidy.
Prof. Corak specializes in analysis of federal labour support programs such as Employment Insurance , and he spent time in 2017 as the economist in residence with the federal department of Employment and Social Development. The minister’s office said in a statement Monday that the government “will announce next steps soon.”
In an interview Monday, Prof. Corak said there was a stronger argument for the wage subsidy at the onset of the pandemic, when the E.I. system was largely overwhelmed and the government was under pressure to come up with an alternative. But he said now that the E.I. program has been enhanced, and now that employment levels have bounced back and the policy shortcomings of CEWS are known, the federal Liberals should resist pressure to announce another extension.