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

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

OTTAWA — 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.

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.

Just Posted

Grade one teacher Heidi Dimou arranges the desks in line with physical distancing policy in her class in preparation for the new school year at the Willingdon Elementary School in Montreal, on Wednesday, August 26, 2020. THE CANADIAN PRESS/Paul Chiasson
Alberta students expected to return to in-person learning next week

Kids can anticipate a return to the classroom next week in Alberta.… Continue reading

This grizzly bear had been hanging out near Aurum Lodge and the Cline River area and was later killed by Fish and Wildlife, says an area resident. (Contributed photo)
Grizzly sniffing for human food west of Nordegg killed

Lodge owner reminds campers to keep all food away from wildlife

Coal mining in Rockies. CP photo
Alberta gov’t releases preliminary results from coal mining survey

The provincial government has released the initial results from its coal policy… Continue reading

(Black Press file photo.)
Wildfire advisory lifted for Rocky area

The wildfire danger in the Rocky Mountain House Forest Area is now… Continue reading

House sales drop in northwestern B.C. (THE CANADIAN PRESS Jonathan Hayward)
Central Alberta real estate continues its hot streak

793 residential units sold in central Alberta through April compared with 210 in 2020

Red Deer musician Curtis Phagoo is glad the Alberta government is investing $2 million to help the province’s live music industry, but he would have liked the criteria to be expanded, so the money could be used as relief to cover revenue shortfalls. (Contributed photo by Cory Michaud)
Red Deer musicians welcome $2M in grants to help live music, but would have preferred relief program

The money is for future projects and can’t be used for retroactive expenses

(CPAC)
Trudeau says he knew about investigation into general overseeing vaccines weeks ago

OTTAWA — Prime Minister Justin Trudeau says he learned weeks ago that… Continue reading

Canadian and American flags fly near the Ambassador Bridge at the Canada-USA border crossing in Windsor, Ont. on Saturday, March 21, 2020. Canadian residents are allowed to head to the United States for a COVID-19 vaccine and avoid quarantine on return if they meet some straightforward conditions, the Public Health Agency of Canada confirms.THE CANADIAN PRESS/Rob Gurdebeke
Canadians can drive to U.S. for COVID-19 vax and avoid quarantine, Ottawa confirms

TORONTO — Canadian residents are allowed to head to the United States… Continue reading

Prime Minister Justin Trudeau holds a press conference in Ottawa on Tuesday, May 18, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Quebec can modify part of the Canadian Constitution unilaterally: Trudeau

MONTREAL — Prime Minister Justin Trudeau says Quebec can unilaterally modify part… Continue reading

In this Thursday, April 29, 2021, file photo, giant bucket-wheel excavators extract coal at the controversial Garzweiler surface coal mine near Jackerath, West Germany. Canadian environmentalists are welcoming a report from the International Energy Agency that says new fossil fuel investment must end if the world is to meet its climate goals. THE CANADIAN PRESS/AP -Martin Meissner
Canadian environmentalists happy with International Energy Agency report

Environmentalists say a report from the International Energy Agency that concludes investment… Continue reading

Prime Minister Justin Trudeau holds a press conference in Ottawa on Tuesday, May 18, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Ceasefire needed in Israeli-Palestinian conflict to avoid loss of more civilians: PM

OTTAWA — Prime Minister Justin Trudeau says Canada is calling for a… Continue reading

A forest fire burns late into the evening northeast of Prince Albert, Sask., on Monday, May 17, 2021. THE CANADIAN PRESS/Kayle Neis
Saskatchewan wildfire grows, forcing evacuations in the area to expand

PRINCE ALBERT, Sask. — Dry conditions and strong winds caused a large… Continue reading

A man makes his way past signage to a mass COVID-19 vaccination centre at the University of Toronto's Mississauga campus during the COVID-19 pandemic in Mississauga, Ont., on Monday, May 17, 2021.  THE CANADIAN PRESS/Nathan Denette
Tam hopeful for summer even as Canada hits grim death milestone in COVID-19 pandemic

OTTAWA — Chief Public Health Officer Dr. Theresa Tam says she expects… Continue reading

Sheffield United’s Daniel Jebbison celebrates after scoring his side’s opening goal during the English Premier League soccer match between Everton and Sheffield United at Goodison Park in Liverpool, England, Sunday, May 16, 2021. THE CANADIAN PRESS/AP-Alex Pantling/Pool via AP
Canadian teenager Daniel Jebbison turns heads with Premier League goal

Jebbison, 17, is the youngest player in Premier League history to score on his first start in England’s top tier

Most Read