Fiscal room tightening as economy teeters, associate finance minister says
CTV
Canada's associate finance minister says it's going to be a "turbulent" year for the economy, but Randy Boissonault insists the government still has some spending room for big priorities including a new health-care deal with the provinces.
Canada's associate finance minister says it's going to be a "turbulent" year for the economy, but Randy Boissonault insists the government still has some spending room for big priorities including a new health-care deal with the provinces.
Boissonnault was speaking before the cabinet meets on the second of a three-day cabinet retreat in Hamilton, Ont. Finance Minister Chrystia Freeland is set to give an economic update to cabinet later Tuesday.
"There's lots of uncertainty," Boissonnault said. "So we're going to be watching this every step of the way as we get ready for budget (2023). We still have fiscal room to be able to do the things we need to do but the fiscal room has tightened."
He said the war in Ukraine and inflation are among the issues causing both uncertainty and economic harm.
On Monday, a joint report from the Business Council of Canada and Bennett Jones warned that the fiscal forecast laid out in the last federal budget and the fall economic statement was likely too rosy.
The report, written by former Bank of Canada governor David Dodge and former Liberal finance policy adviser Robert Asselin, said the government's forecast was based on a "plausible but optimistic" set of economic and interest-rate assumptions that are unlikely to come true.
They warn there is a "high likelihood of a more severe recession" this year and that the Liberal promises on everything from health-care funding and enhanced national defence spending to infrastructure improvements and climate change are going to cost a lot more than projected.
