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

Lack of education playing role in Fraser North students missing out on mental health services

2018 B.C. Adolescent Health Survey notes students do not know where to turn to for help

School District 42 provides update on continued learning plan

Superintendent Sylvia Russell says staff will be in touch with Ridge Meadows students and families

LETTER: Upset by province’s stance against Lower Mainland hospice

Vocal Maple Ridge anti-MAiDs advocate opposes cancelling of contract with Delta facility

LETTER: Pandemic a little surreal for this guy

One day soon, COVID-19 will simply be a footnote: one Maple Ridge reader

GUEST VIEW: Media importance never more apparent than with COVID-19

In swan-song column, reporter Phil Melnychuk suggests more concerted PR early on might have helped

Blue ribbons popping up along streets in Abbotsford in praise of B.C. healthcare workers

Healthcare worker’s family starts local trend of morale support

B.C. is seeing the highest rate of COVID-19 recovery in Canada, and there’s a few reasons why

British Columbia was one of the first to see rise in COVID-19 cases, and has also switched up testing

Earth Hour 2020 kicks off online Saturday night

Action moves online due to COVID-19

B.C. COVID-19 cases rise 92 to 884, one more death, 81 in care

Outbreak action underway in 12 long-term care homes

B.C. veterinarians want to smooth the fur of COVID-19-worried pet owners

Vets expect to continue giving your fur buddies the help they need while social distancing

B.C. VIEWS: Small businesses need our help

Just as integral in neighbourhoods in Vancouver and Surrey as they are in Prince George or Kelowna

‘Tremendous’ response from blood donors has supply keeping pace with demand

About 400,000 of Canada’s 37 million residents give blood on a regular basis

Most Read