In an interview with The West Block‘s Mercedes Stephenson, Morneau said part of the reason the government feels like it can respond well to what he called the “very real potential challenges” of the coronavirus spread comes from strong employment numbers and its ratio of debt to GDP.
“I think what people need to know is that, you know, we have a strong fiscal position, so we’re prepared in terms of the actual health risks, but we’ve a strong position fiscally so that we can actually take measures as needed as the facts come out,” he said.
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“We’re going to be prepared to announce them when and if that comes. The good news, again, is that we have the capacity to do that.”
Morneau also acknowledged last week that officials are changing their risk adjustment provision for the upcoming federal budget in response to COVID-19, which has caused shock waves through financial markets around the world over recent months.
But Brian DePratto, director of economics at TD Bank, urged more caution.
“I think he’s taking a relatively narrow view of the economy,” he said of Morneau’s comments.
“If you take a broader picture, we had a very soft end to last year, business investment sort of struggling to gain traction for a number of years now. Looking at recent developments – rail blockades, weather, other factors – already [it’s] a soft start to the year before we even talk about coronavirus. So I think we don’t really have a lot of growth buffer to work with here in Canada.”
DePratto noted that while Morneau is right that Canada is in a better fiscal position than many of its allies, that doesn’t mean it has much in the way of economic wiggle room. As a result, if the government wants to put out new programs to help reduce the impact of the virus, it may need to make changes elsewhere.
“It’s a little bit of a balancing act,” he said.
“They’re going to be doing a pros and cons kind of analysis and we could see some reshuffling of the cards.”
1:29 Coronavirus outbreak: Federal government to offer support for quarantined Canadians impacted by COVID-19
Coronavirus outbreak: Federal government to offer support for quarantined Canadians impacted by COVID-19
While Morneau wouldn’t say what measures the government was considering, he said there are a number of options that have been used in the past.
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He also hinted last week that the focus would be on helping people who find themselves in quarantine but that right now, the impact of the spread of the virus in Canada is still not clear.
While Health Minister Patty Hajdu has called the virus “low-risk” for Canadians, the country now has more than 50 confirmed and presumed cases in four provinces, and the federal government is boosting cash available for research from $7 million to $20 million.
Health officials in B.C. also raised questions on Friday that the province may have its first case of community spread of the virus, meaning someone there got it from another person rather than from travel abroad or contact with known cases.
The U.S. has also barred entry to Canadian travellers who have recently been in several of the countries hit hardest by the outbreak, raising more questions about what the impact of a more extensive border crackdown could mean for businesses and Canada’s export-reliant economy.
Morneau said his job is to consider all possibilities, and that’s what he’s doing.
DePratto added it’s tough to tell right now what the extent of the economic impact will be.
“We’re not talking about a recession quite yet but really a bit of a grind.”
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3:41 The economic impact of the coronavirus, explained
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Finance Minister Chrystia Freeland says the government is making some changes to mortgage rules to help more Canadians to purchase their first home.
She says the changes will come into force in December and better reflect the housing market.
The price cap for insured mortgages will be boosted for the first time since 2012, moving to $1.5 million from $1 million, to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
On Aug. 1 eligibility for the 30-year amortization was changed to include first-time buyers purchasing a newly-built home.
Justice Minister Arif Virani is also releasing drafts for a bill of rights for renters as well as one for homebuyers, both of which the government promised five months ago.
Virani says the government intends to work with provinces to prevent practices like renovictions, where landowners evict tenants and make minimal renovations and then seek higher rents.
The government touts today’s announced measures as the “boldest mortgage reforms in decades,” and it comes after a year of criticism over high housing costs.
The Liberals have been slumping in the polls for months, including among younger adults who say not being able to afford a house is one of their key concerns.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales rose 1.4 per cent to $71 billion in July, helped by higher sales in the petroleum and coal and chemical product subsectors.
The increase followed a 1.7 per cent decrease in June.
The agency says sales in the petroleum and coal product subsector gained 6.7 per cent to total $8.6 billion in July as most refineries sold more, helped by higher prices and demand.
Chemical product sales rose 5.3 per cent to $5.6 billion in July, boosted by increased sales of pharmaceutical and medicine products.
Sales of wood products fell 4.8 per cent for the month to $2.9 billion, the lowest level since May 2023.
In constant dollar terms, overall manufacturing sales rose 0.9 per cent in July.
This report by The Canadian Press was first published Sept. 16, 2024.
