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
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.
