Opinion: COVID-19’s consumer crimes aren’t just for Justin Trudeau — every government is

Finance Minister Chrystia Freeland and Prime Minister Justin Trudeau bumped into each other after the federal government unveiled its COVID-19 spending plan.Sean Kilpatrick/The Canadian Press

Jason Clemens and Jake Fuss are economists at the Fraser Institute.

Auditor General’s recent report cites billions in questionable spending in Ottawa’s handout administration Related to COVID-19. But while the report does (again) raise questions about capacity, it should not mislead Canadians into believing this failure is unique to the Trudeau government.

We’ve seen a lot of the same from previous administrations.it’s a bigger problem systemic government failure.

this new assessment is damn it indeed. Auditor-General Karen Hogan Finds $4.6 billion in overpayments to unqualified recipients and recommends that the government investigate the nature of an additional $27.4 billion in spending. The AG also criticized Ottawa for not requiring the company’s workers to provide social insurance numbers. Canada Emergency Wage Subsidywhich means proper validation and tracking cannot be done.

This is on top of a federation with unclear goals Coronavirus disease expenditure.our Study in 2020For example, examining nearly $82 billion in pandemic spending, an estimated 27 percent were untargeted, wasting more than $22 billion in taxpayer dollars. This, combined with the mismanagement the AG points out, means that Ottawa is spending far more than needed and accumulating far more debt than is necessary to stabilize the economy and help those who really need it.

Therefore, the capacity of the government is a legitimate question.However, too much attention Trudeau Government means Canadians are at risk of thinking these failures are simply the result of the current government inability.

consider a Study in 2013, which analyzed more than 600 instances of government failure in AG reports between 1988 and 2013, covering multiple federal governments. One example is the 2001 Heating Bill Relief Program, which was designed to provide financial assistance to low-income Canadians to offset higher energy costs using the existing GST credit system. The AG found that less than a quarter of the $1.5 billion in payouts went to low-income households facing emergency heating bills, while as many as 1 million of the 7.6 million households that received payments may have received more payment. In addition, at least 4,000 Canadians living abroad, as many as 1,600 prisoners and at least 7,500 deceased people also received payments.

Or consider a 1998 report that examined the integrity of Canada’s Social Insurance Number system, the basis for government payments to individuals. The report found that more than 50 per cent of SINs have no supporting documentation, that there are 12 million unverified SIN accounts on the registry, and that Canadians 20 and older have 3.8 million more SINs than the total population. The potential for fraud is clearly significant.

The reality of the government is that it has many Constraints and Featureswhich means it operates differently than the market and, perhaps most importantly, differently than many Canadians imagine.

These limitations and features include the need for popular and win elections; competition among interest groups and their primacy in the political market; this monopoly the environment in which most governments operate; this lack of price and profit Serve as a source of information on how best to allocate limited resources; separate revenue (taxes) from services provided; and Lack of traditional financial constraints.

All of this means that the government is unique in how it operates in the economy. They are naturally inclined to increase spending, but are often less targeted and can sometimes be more powerful than the will and desire of the ruling party.

The sooner Canadians better understand these limitations, the sooner we can minimize the impact of waste and government failure by focusing criticism and demands in the correct area.

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