Canada’s finance minister laid out the broad strokes of this year’s federal budget, saying she wants to boost the country’s economic potential while minding inflation rates not seen in 30 years.
Chrystia Freeland also said the budget would address housing affordability concerns, indicating the document could include a slew of measures to crack down on housing investors that were outlined in her marching orders from the prime minister.
During a late afternoon news conference where she launched pre-budget consultations that run until late February, Freeland focused her comments on the need for the budget to make the country more competitive and innovative.
She also noted a need for the budget to help fund the transition to a green economy, whose costs could be steep, and move beyond the recent focus on reducing greenhouse gas emissions.
“When I look at what I want to have in the budget, I want to have measures that increase the ability of Canada to grow really, really strongly post-COVID,” Freeland said.
“An economy which is expanding is an economy which can really create prosperity for all of its people.”
2:41 Canada’s fiscal update includes future spending in response to COVID-19: Freeland
Canada’s fiscal update includes future spending in response to COVID-19: Freeland – Dec 14, 2021
Freeland said a growing economy would help keep federal finances on solid footing after an expensive two years when the treasury has pumped out unprecedented aid to combat the economic fallout from COVID-19.
The Finance Department is projecting the deficit this year to hit $144.5 billion, one year after a shortfall of $327.7 billion. The deficit for the next fiscal year, starting in April, is projected to hit $58.4 billion, not including any new spending promises in the budget.
Speaking to the House of Commons finance committee earlier Monday, parliamentary budget officer Yves Giroux said he expected deficits to be the norm for the coming years.
That’s not necessarily a problem, he said, so long as the deficits are “relatively small” and the economy grows, bringing in more in federal revenues to pay for the increased costs.
The risk with larger federal deficits comes down to where the government spends its money, Giroux said. If the spending doesn’t create extra productive capacity in the economy and instead stimulates demand, “it can lead to inflationary pressures,” he said.
1:31 Bank of Canada holds interest rates for now, signalling hikes to come
Bank of Canada holds interest rates for now, signalling hikes to come
The Bank of Canada said last week the economy appears to have hit its productive capacity, leading to a scenario where too much government stimulus could boost consumer spending and add to inflation strains.
Freeland said the government would be mindful of higher inflation rates as she crafted her spending plan.
Separately Monday, Giroux’s office projected that the government’s hiring program would fall well short of what’s budgeted to provide subsidies for eligible businesses that expand their payroll.
While the government has budgeted almost $2.8 billion in subsidies, the budget office projects total subsidies will only hit $814 million.
The difference comes down in part to how the government and PBO expect the economy, and businesses, to fare in the coming months.
The budget office noted in its report that there is some uncertainty about the pace of economic growth, notably the potential impacts of COVID-19 in the future.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
