‘Our economy is strong and it’s growing’: Morneau on fiscal update
Canada’s finance minister said the focus of Monday’s economic update should be on economic growth and lower income taxes as opposed to the country’s escalating deficit over the next several years.
“The core message is that our economy is strong and it’s growing,” said Finance Minister Bill Morneau in an interview with BNN Bloomberg on Monday. “We’ve seen growth this year. We’re expecting growth next year.”
“We have strong employment,” he added. “This year we will have the lowest unemployment rates we’ve seen in 40 years and wage growth is in excess of inflation. So, that’s all positive.”
The federal government released a fiscal update on Monday with deficit figures that eclipsed previous estimates.
Prime Minister Justin Trudeau’s Liberal party forecasted deficits of $26.6 billion for 2019 and $28.1 billion in 2020 in the report, up from the $19.8 billion and $19.7 billion projected in the government’s previous budget.
The Liberals also pledged about $15 billion in new measures ahead of October’s federal election, from which they emerged with a minority mandate.
However, Kevin Page, a former parliamentary budget officer, told BNN Bloomberg earlier on Monday that he doesn’t buy into the Liberals’ math.
“I don’t think it’s fair to say that the government has a strong fiscal plan right now,” Page told BNN Bloomberg’s Amanda Lang. “The investments that they’re talking about are really modest tax cuts. From an economic perspective, are we going to get a lot of growth from a modest tax cut at this stage of the cycle? Probably not so much.”
“I think we need to be concerned right now. We just sort of have this weak fiscal plan.”
Morneau shot back that, “investing in putting more money in people’s pockets,” is a strategy to also boost the Canadian economy, adding that the government placed a priority in lowering the country’s debt-to-output ratio and preserving its triple-A credit rating.
“We’re not trying to have fun with numbers, we’re just trying to make sure that people are better off,” Morneau said.
“We’re trying to deal with economic anxiety, and this is the first and most important measure we’re moving forward with because we see it as not only a campaign commitment, but the right thing to do for our economy when we’re trying to keep the growth that we’ve seen to continue.”