Report: The Canadian Federal Government Borrowed and Wasted Nearly $90 Billion on Covid-19 Response, Costing Taxpayers

According to a recent report by the Fraser Institute, the Canadian federal government's COVID borrowing and spending response amounted to a staggering $359.7 billion. However, the report reveals a concerning fact: an estimated minimum of 25 percent ($89.9 billion) of these funds were wasted.

The report highlights the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Response Benefit (CERB) as the main contributors to this financial waste. These programs were plagued by overpayments, the provision of funds to individuals and businesses that didn't genuinely require them, and excessive support that exceeded the necessary level for income stabilization.

Moreover, the consequences of this wasteful spending are further amplified by projected interest costs. Over the next decade, Canada's federal government is expected to incur $21.1 billion in interest costs specifically attributed to the fiscal waste resulting from COVID-related expenditures.

The report also notes that despite the significant borrowing and accumulation of debt, Canada's economic performance did not match that of its industrialized peers. In 2020 and 2021, Canada exhibited higher unemployment rates and relatively low rates of economic growth when compared to 33 other industrialized countries. These disparities suggest that the extensive borrowing did not yield the desired economic outcomes and raise questions about the effectiveness of the allocated funds.