Finance Minister Bill Morneau speaks during a press conference following meetings with provincial and territorial finance ministers in Ottawa on Tuesday, Dec. 17, 2019. The political war-of-words around the national economy took another turn on Sunday’s political talk shows as the federal finance minister warned Conservatives to stop warning of a looming recession. THE CANADIAN PRESS/Sean Kilpatrick

Morneau takes shot at Tories over recession talk in wake of fiscal update

The Liberals’ election platform projected four years of deficits of more than $20 billion

The political war-of-words around the national economy took another turn on Sunday’s political talk shows as the federal finance minister warned Conservatives to cease claims of a looming recession.

Finance Minister Bill Morneau also suggested in separate broadcast interviews that the country’s economic track will have a bearing on how the Liberals steer their government’s budget in the coming years.

On CTV’s Question Period, Morneau warned his Conservative critics to avoid the “irresponsible” claims when private sector economists project growth, which the fiscal update estimated at 1.7 per cent this year and 1.6 per cent in 2020.

The projections would make Canada’s the second-fastest-growing economy among G7 countries, behind only the United States.

“I think it’s a little bit irresponsible of the Conservatives to be making people more anxious,” Morneau said in the CTV interview.

Conservatives claim the conditions are ripe for a “made-in-Canada” recession, fuelled by the Liberals’ spending policies, as the party’s finance critic, Pierre Poilievre, claimed last Monday in the wake of the fiscal update.

“I’m not saying there is (a recession), but if we head to a recession, it will be a made-in-Canada recession,” Poilievre told reporters at the time.

The technical definition of a recession is two consecutive quarters of economic contraction, but the scope of the declines makes a difference between adorning the label to the downturn of 2008 or the split to do so for the two quarters of declines measured in 2015.

READ MORE: Liberals’ fiscal update shows billions more in deficits this year and next

On Sunday, Morneau said the government wants to ensure continued growth, particularly after disappointing jobs numbers from November revealed the economy shed some 71,000 jobs.

“We need to play our hand cautiously, but I see the economy as strong and I see it as growing,” Morneau said on Question Period.

Morneau’s fiscal updates released Monday showed the Liberals’ projected deficit of $19.8 billion for this fiscal year will now be $26.6 billion, and next year it will be $28.1 billion before accounting for the Liberals’ election promises.

The Finance Department said the deeper deficit is largely driven by changes to how employee pensions and benefits are calculated — a hit that grows when interest rates are low, but could drop sharply when interest rates rise.

The Liberals’ election platform projected four years of deficits of more than $20 billion, including almost $27.4 billion in 2020-21.

Experts and the parliamentary budget officer suggested the government’s fiscal wiggle room had suddenly narrowed considerably, particularly if the economy slows down.

The budget officer suggested in its review of the fiscal update that the Liberals have run deficits between $18 billion and $28 billion, which may act as an “implicit fiscal anchor” for Morneau. The finance minister didn’t say how deep a federal deficit he would be comfortable seeing.

“The hypotheticals about what might or might not happen in the future are very dependent on where we go in the economy,” Morneau said on Global’s The West Block.

“We expect strong growth that will allow us to continue to make these investments.”

Morneau said in the interview that the Liberals planned to focus on maintaining the country’s triple-A credit rating, keeping that “fiscal firepower” as Trudeau has asked and making sure the national debt declines as a percentage of the overall economy.

He also said the Liberals would continue spending on things that matter to Canadians.

The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

City of Lacombe to spend $15,000 over five years on stocking Len Thompson Pond

Popularity of facility means further stocking necessary

City of Lacombe council approves 2020 residential and commercial utility rates

Average household will see a utility bill increase of approximately $1.14 a month over last year

City prioritizes 2020 Lacombe trail projects

Cancelled projects will remain part of City’s Trail Plan

Lacombe Athletes Earn Bid to Cheerleading World Championships

Annika McDonald, Piper Fafard and Cheyenne Bowman part of first ever Red Deer at World’s Competition

AA Lacombe Gens’ command Game 1 in NCHL playoffs with 2-1 win

Game 2 against Daysland coming Feb. 1 to Gary Moe Auto Group Sportsplex

VIDEO: Kenney wants feds to approve Teck mine for benefit of First Nations

‘Surely [reconciliation] means saying yes to economic development for First Nations people’

Landowner hearings begin for Trans Mountain expansion in Alberta

Detailed route talks start in Spruce Grove, in B.C. communities soon

VIDEO: Canada looking to help 126 Canadians quarantined in China for coronavirus

China has confirmed more than 4,500 cases of the new virus, with more than 100 deaths

UPDATE: Sylvan Lake RCMP say missing female located

19-year-old Alyssa Manderville was last seen in Blackfalds on Jan. 26

Ryan Jake Applegarth, 27, charged with First Degree Murder

RCMP Major Crimes Unit seeking male wanted on first degree murder charge

Watch out for scams, clickbait in the wake of Kobe Bryant’s death: Better Business Bureau

Kobe Bryant and his daughter were killed in a helicopter crash near Los Angeles

Despite reports of decline, birds flocking to national parks in Canadian Rockies

Recent studies suggest overall bird population has slid by three billion since 1970

Pregnant B.C. woman stuck in Wuhan, the epicentre of coronavirus outbreak

Woman is due to give birth in Wuhan, China unless she can get out

Majority of Canadian boards had no female members in 2016 and 2017: StatCan

Statistics Canada says 18.1 per cent of director seats were held by women in 2017

Most Read