Painful as it may be, pandemic wage and business subsidies will eventually stop

DM

An election could end the government handouts that some critics say have become counterproductive. The U.S. and Canada — two economies that claim to be governed by market forces — hand out billions of dollars in taxpayer support for business every year. And as the COVID-19 crisis struck, those handouts increased. When pandemic-related measures forced the shutdown of businesses and threw people out of work, central banks slashed interest rates and governments dumped money into the economy via wage and rent supports, hoping to prevent the long-term economic damage that is sometimes called “scarring.” But subsidies always come with a problem: Figuring out how and when to end them. And as we examine today’s jobs numbers from Statistics Canada, some — including the Canadian Federation of Independent Business (CFIB) — say the Canada Recovery Benefit, intended to help the jobless, may be making unemployment worse.

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