Perrin Beatty was on his way home from the office when his phone rang. It was Chrystia Freeland, who 24 hours earlier had become Canada’s finance minister.
For the president of the Canadian Chamber of Commerce, the call signaled how Freeland will approach her new portfolio — reaching out to multiple stakeholders and listening to ideas before embarking on a path forward.
As much as some might see her as a change from Bill Morneau, who abruptly resigned Monday, there was no hint of a major shift in her earliest hours in the job.
When she spoke to reporters on Tuesday for the first time as finance minister, Freeland talked about going green, as well as equitable and inclusive growth.
Elliot Hughes, a former Morneau adviser now at Summa Strategies, said this suggests the Liberals plan to double down on their existing approach.
It was also in line with thoughts Freeland laid out in her 2012 book, Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else. She argued governments needed to be alert to extraordinarily wealthy people (think the 0.1 per cent) using their political and financial heft to enlarge their slice of the economic pie, rather than growing the pie itself.
Hughes said Canada’s business community might be surprised at how much she’ll want to help the private sector, despite her writings.
“Just because she has questioned the plutocrats … I don’t think that necessarily means she’s going to be anti-business,” Hughes said.
Hassan Yussuff, president of the Canadian Labour Congress, suggested Freeland would also ensure all new spending has a gender lens so women, who have been disproportionately affected by job and income losses, aren’t left behind in a recovery.
Programs like child care could find themselves potentially with more money, observers noted, because it would be a win-win scenario for the Liberals, opposition parties and provinces, many of whom Freeland worked with through free trade talks.
Yussuff and others said Freeland identified pressure points and political nuances on the American side to use as leverage during negotiations, all the while doing her homework and seeking input from businesses, labour, premiers and MPs.
“As hard as NAFTA negotiations were, and those were extremely difficult, leading Canada’s fiscal and economic rebound from COVID-19 is going to be even harder,” Hughes said.
Economic forecasts suggest that even by the end of 2021, the economy won’t be where it was at the start of 2020. Unemployment is expected to remain high. The government estimates four million people will use a series of income support measures announced Thursday, including changes to employment insurance, that total $37 billion in proposed spending.
Federal spending has rocketed through the course of the pandemic with the deficit to $343.2 billion and debt to $1.2 trillion — both record highs.
Goldy Hyder, president of the Business Council of Canada, asked Freeland in an open letter to “establish clear fiscal targets” to use for judging “incessant demands for new spending.”
Those demands could come from opposition parties in exchange for their support on confidence votes, from departments delivering programs or Freeland’s fellow Liberal MPs, leaving her to manage multiple and politically sensitive relationships.
Rebekah Young, director of fiscal and provincial economics at Scotiabank, said the deficit and debt levels will likely act as a constraint on any new spending plans Freeland crafts because they can also slow growth in the long run.
“If they come out with a whole lot more spending, I think that’s where they risk spooking markets a bit that they are not looking at the economic conditions, they are looking at more the political side of spending,” Young said.
Freeland on Thursday couldn’t say what would be in her first budget, noting she didn’t get an economic crystal ball at her swearing-in ceremony two days earlier. She also said the government would continue to do what was necessary to support Canadians.
One of the next steps is a promised a reshaping of the social safety net that will be detailed more in a throne speech late next month, and a budget to arrive shortly thereafter that workers and businesses at home as well as abroad will closely watch.
“Her success is critical for the country and that means that she needs to have absolute support from the prime minister and from members of cabinet,” Beatty said.
“They have to understand that the whole of the world is watching.”
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.
Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.
Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”
The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.
Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.
“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”
Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.
Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.
Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.
B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.
The election is expected to be called on Sept. 21, with the vote set for Oct. 19.
“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”
Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.
Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.
The premier said that now is not the time to reduce supports and services for people.
Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.
Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.
This report by The Canadian Press was first published Sept. 10, 2024.
Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.
NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.
But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.
He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.
Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.
Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.
Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.
This report by The Canadian Press was first published Sept. 10, 2024.
