Trudeau not keen to set fiscal targets amid record spending
Justin Trudeau signaled his government won’t immediately set a new fiscal anchor as it rolls out more COVID-19 spending.
The prime minister, speaking Monday to the Canadian Chamber of Commerce, said the pandemic has been too disruptive for his team to commit to a strict budgetary goal in its next update, expected in November.
“There’s a lot of uncertainty still around where we’re going to be at the end of this pandemic and I think it would be premature to be locking things down, but we will certainly talk about the frame and responsibility that’s necessary,” Trudeau said via video conference when asked about a fiscal anchor.
The last official government estimate of this year’s budget deficit was $343.2 billion (US$259.8 billion) in July, or 16 per cent of gross domestic product. Various new spending announcements will likely put the figure closer to $380 billion when Chrystia Freeland delivers her first fiscal update since taking over as finance minister.
Trudeau is under pressure from business leaders and his political rivals to set a new goalpost after the pandemic forced him to abandon a declining debt-to-GDP ratio. The hit to the public purse also prompted Fitch Ratings to strip Canada of its AAA status, the preservation of which had been a primary mission for Freeland’s predecessor Bill Morneau.
In addition to updating government forecasts, the snapshot Freeland is putting the finishing touches on is expected to begin detailing some of the Liberal government’s longer-term spending agenda.
Trudeau reiterated Monday that his government would continue to do “whatever it takes” to support the country through pandemic before returning to a more normal budgetary approach.
“We will be responsible and fiscally balanced and have fiscal anchors, but for as long as the pandemic lasts we’re going to support Canadians and Canadian businesses directly and significantly,” he said.