Speaking to business leaders at a local company in Gatineau, Que., Freeland said that even with inflation beginning to ease off, the road ahead will be difficult.
“It is important, as deputy prime minister and minister of finance, that I tell people the truth about what awaits us,” she said in French.
“Our economy will slow down as the central bank has to tackle inflation.”
Freeland says she won’t ‘sugar-coat’ the economic difficulties facing Canadians
While she warns of a recession ahead, Finance Minister Chrystia Freeland says the federal government has the right tools in place to get through this period successfully.
While Freeland didn’t use the word recession, most consumers and businesses think Canada will enter one, according to new surveys from the Bank of Canada.
The third-quarter business outlook and consumer expectations surveys, released Monday, show more than half of consumers surveyed believe there is at least a 50 per cent chance of a recession. And almost half of consumers report they’re buying less and buying more items on sale in an effort to cope with the cost of living.
Speaking to reporters after her speech on Monday, Freeland said the coming months will be a “challenging economic time.”
“I’m not going to sugar-coat it, and I’m not going to claim that we don’t have some challenges ahead,” she said, adding that rising interest rates will have an impact as the Bank of Canada tries to rein in inflation.
The annual inflation rate was seven per cent in August, the most recent available number. Statistics Canada will release its latest inflation numbers on Wednesday.
Freeland suggested all countries will be hit with the same economic downturn.
The International Monetary Fund (IMF) downgraded its 2023 outlook for the world economy last week, warning that next year “will feel like a recession” for many thanks to central bank reactions around the world.
The IMF, the lending agency for 190 countries, said on Oct. 11 that global economic growth would be a meagre 2.7 per cent in 2023, down from the 2.9 per cent it had estimated in July. The world economy grew by six per cent in 2021.
The IMF said the slowdown is being driven by Russia’s war in Ukraine, chronic inflation pressures, punishing interest rates and the lingering consequences of the global pandemic.
“The worst is yet to come,” said IMF chief economist Pierre-Olivier Gourinchas.
The 2023 growth estimate for Canada has dropped to 1.5 per cent, down three-tenths of a percentage point from the last estimate made in July. Canada’s growth estimate for 2022, meanwhile, fell to 3.3 per cent from July’s 3.4 per cent estimate.
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.
