President of the Treasury Board, Jean-Yves Duclos says he has “a good degree of confidence” in Canada’s ability to exit the recession created by the novel coronavirus outbreak.
But, when asked by The West Block’s Mercedes Stephenson how the government is going to pay for the billions it has spent in emergency aid, Duclos said officials are “focused on the emergency,” adding that without spending, Canada could slip into a depression.
Coronavirus outbreak: Jean-Yves Duclos discusses details of government’s wage subsidy
“The alternative, if we didn’t do this, would be depression,” he explained. “A depression is a recession which is a lot longer and a lot deeper than a recession and with consequences for the coffer that would be even greater.”
He said if the government didn’t act quickly, unemployment would increase further, wages would drop and the deficit and debt would “increase rapidly.”
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“And we are acting quickly, again, to avoid moving from a recession, in which we are obviously finding ourselves now, towards a depression,” he said.
As the pandemic hit Canada, the government ramped-up its spending, developing emergency programs aimed at keeping Canadians afloat while schools and businesses closed their doors.
On Thursday, Parliament’s budget watchdog released a report which said it’s likely the federal deficit for the year will hit $252.1 billion and could go even higher if emergency measures remain in place longer than planned.
The figure is an estimate based on the almost $146 billion in spending measures the government has announced to help cushion the economic blow from the pandemic, estimated declines in the country’s gross domestic product, and the price of oil remaining well below previous expectations.
Asked if Canadians can expect to see tax increases or cuts to government programs as a result, Duclos said for now, officials are focused on handling the emergency.
But, he said Canada entered the crisis with a “strong economy,” and had the strongest fiscal situation of all developed economies.
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“We had full employment,” he said. “So we started from a very strong position and we are confident that the economy will rebound quickly once we go through the health crisis because as we all know, this is initially a health crisis.”
He said that is why all Canadians “need to do our part” and follow guidance from public health officials.
“But because of the strength of the fiscal situation and the strength of the economy before the crisis, we have big confidence in moving the economy back quickly to a stronger position,” he said.
0:51 Coronavirus outbreak: Officials say decision to extend Canada-U.S. border closure ‘absolutely necessary’ for movement of essential supplies
Coronavirus outbreak: Officials say decision to extend Canada-U.S. border closure ‘absolutely necessary’ for movement of essential supplies
According to Duclos, the “absolute priority” is getting Canadians back to work.
“If you want to decrease the fiscal costs, you want to reduce the deficit,” he said.
“We need people back to employment.”
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“Now, we know we’re going to do that better and more quickly if we maintain the economic fabric of our society and the particular small business fabric of our economy.” He said Canada’s growth for years has been driven by the ability of small businesses to invest in workers and the economy.
“That’s why a very important objective of the plan — it’s a big plan — is to maintain the ability of small businesses to go through the crisis and then to emerge strongly, and to rehire as many workers as possible,” he said.
On Saturday, Canada’s chief public health officer, Dr. Theresa Tam issued a statement saying Canada has managed to bring the rate of infection down, by heeding the advice of medical authorities.
“We are flattening the curve,” she wrote.
And, over the last several weeks, provinces have begun releasing their plans to reopen their economies, with some already starting to relax restrictions.
Canada’s hardest-hit provinces — Ontario and Quebec — will begin reopening Monday, May 4.
However, Prime Minister Justin Trudeau has warned that things will not return to normal until an effective treatment or a vaccine is developed.
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.
