Prime Minister Justin Trudeau and former finance minister Bill Morneau in Ottawa, March 19, 2019.Chris Wattie/Reuters
Former finance minister Bill Morneau delivered a pointed critique of the federal Liberals’ economic policies, along with a series of recommendations for kickstarting growth, in his first public speech since leaving political life two years ago.
Mr. Morneau, finance minister in the Liberal government from 2015 to 2020, echoed the concerns of business leaders who have urged Prime Minister Justin Trudeau to focus on expanding the Canadian economy, rather than rolling out tax-and-spend initiatives.
“When I look at politics in Canada today – from the perspective of a former insider – I have to confess that I’m much more worried about our economic prospects today, in 2022, than I was seven years ago,” he said.
“So much time and energy was spent on finding ways to redistribute Canada’s wealth that there was little attention given to the importance of increasing our collective prosperity,” said Mr. Morneau in a speech Wednesday evening to the C.D. Howe Institute.
Mr. Morneau highlighted research by the Organization for Economic Co-operation and Development that forecast growth in Canada’s gross domestic product over the next four decades will significantly lag expansion in the U.S., Australia and comparable European economies.
“There is no real sense of urgency in Ottawa about our lack of competitiveness,” said Mr. Morneau. “It’s not that this is one of the big problems facing Canada’s economy, it’s that this is our fundamental problem. Nothing else is solvable if we don’t put this issue first.”
Ahead of April’s federal budget, senior business leaders, such as Royal Bank of Canada chief executive Dave McKay, voiced frustrations with the government’s approach, saying they saw tendencies toward short-term decision making, lavish spending and sporadic engagement with corporate Canada.
While Mr. Morneau never mentioned his successor as finance minister, Chrystia Freeland, or the Prime Minister by name, he devoted a considerable amount of his 20-minute address to problems with a partisan political process that favours style over substance. Mr. Morneau resigned from his post amid the We Charity probe.
“We have to stop thinking about policy in terms of short-term wins, and refocus our efforts on long-term solutions. I know that all of the political incentives run counter to this,” said Mr. Morneau, who ran the country’s largest employee benefits firm – Lifeworks, formerly known as Morneau Shepell – prior to entering politics in 2015.
To ensure a long-term focus on business issues at the federal level, Mr. Morneau said Canada needs a “permanent Growth Commission, drawing on expertise from the public and private sector, that reports to a federal/provincial body, with input from all parties.”
The concept picks up on recommendations from Bank of Nova Scotia chief executive Brian Porter, who recently called for a new federal commission on Canada’s economic prosperity.
Mr. Morneau said federal and provincial governments need to do more to co-ordinate policies and delivery of services such as health care.
“Even though many of the levers for our economic opportunities are shared, federal interactions with the provinces and territories are, for the most part, episodic, with no clearly identified and executed strategy,” said Mr. Morneau. He pointed out that Alberta Premier Jason Kenney’s recent resignation offers the Prime Minister a chance to reset the relationship with the resource-rich province.
Without specifically pointing to Conservative leadership candidates, Mr. Morneau also took issue with populist campaigns, such as that of Pierre Poilievre, who has repeatedly attacked the Bank of Canada, which works at arm’s length from the federal government.
“Canada is a country with political institutions that are, in many cases, the envy of the world,” said Mr. Morneau. “Yet there are politicians – who absolutely do know better – who are not only taking those institutions for granted, they’re willing to actively undermine them if it gives them the slightest political advantage.”
“When you put ‘exciting the base’ ahead of crafting good policy … when you cynically pander to conspiracy theorists … you are doing incalculable harm to the country you claim to love and to the people you seek to lead,” said Mr. Morneau.
Mr. Morneau was finance minister when Canada renegotiated trade agreements with Mexico and a U.S. administration led by president Donald Trump. He said the federal government needs to recognize that the pandemic has made protectionism a factor in every industrialized economy, and a threat to Canadian businesses that rely on exports.
“As much as Canada benefited from trade liberalization in recent years, it will suffer as countries around the world turn inward and take on more protectionist positions,” said Mr. Morneau, who has recently been teaching at Yale University.
“Disengagement with China, combined with broader de-globalization, puts countries like Canada in a challenging place. Natural resources alone won’t save us. Neither will cryptocurrencies, just so we’ve got that on the record.”
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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.
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