Finance Minister Bill Morneau speaks during a press conference following meetings with provincial and territorial finance ministers in Ottawa on Tuesday, Dec. 17, 2019. The political war-of-words around the national economy took another turn on Sunday’s political talk shows as the federal finance minister warned Conservatives to stop warning of a looming recession. THE CANADIAN PRESS/Sean Kilpatrick

Finance Minister Bill Morneau speaks during a press conference following meetings with provincial and territorial finance ministers in Ottawa on Tuesday, Dec. 17, 2019. The political war-of-words around the national economy took another turn on Sunday’s political talk shows as the federal finance minister warned Conservatives to stop warning of a looming recession. THE CANADIAN PRESS/Sean Kilpatrick

Morneau takes shot at Tories over recession talk in wake of fiscal update

The Liberals’ election platform projected four years of deficits of more than $20 billion

The political war-of-words around the national economy took another turn on Sunday’s political talk shows as the federal finance minister warned Conservatives to cease claims of a looming recession.

Finance Minister Bill Morneau also suggested in separate broadcast interviews that the country’s economic track will have a bearing on how the Liberals steer their government’s budget in the coming years.

On CTV’s Question Period, Morneau warned his Conservative critics to avoid the “irresponsible” claims when private sector economists project growth, which the fiscal update estimated at 1.7 per cent this year and 1.6 per cent in 2020.

The projections would make Canada’s the second-fastest-growing economy among G7 countries, behind only the United States.

“I think it’s a little bit irresponsible of the Conservatives to be making people more anxious,” Morneau said in the CTV interview.

Conservatives claim the conditions are ripe for a “made-in-Canada” recession, fuelled by the Liberals’ spending policies, as the party’s finance critic, Pierre Poilievre, claimed last Monday in the wake of the fiscal update.

“I’m not saying there is (a recession), but if we head to a recession, it will be a made-in-Canada recession,” Poilievre told reporters at the time.

The technical definition of a recession is two consecutive quarters of economic contraction, but the scope of the declines makes a difference between adorning the label to the downturn of 2008 or the split to do so for the two quarters of declines measured in 2015.

READ MORE: Liberals’ fiscal update shows billions more in deficits this year and next

On Sunday, Morneau said the government wants to ensure continued growth, particularly after disappointing jobs numbers from November revealed the economy shed some 71,000 jobs.

“We need to play our hand cautiously, but I see the economy as strong and I see it as growing,” Morneau said on Question Period.

Morneau’s fiscal updates released Monday showed the Liberals’ projected deficit of $19.8 billion for this fiscal year will now be $26.6 billion, and next year it will be $28.1 billion before accounting for the Liberals’ election promises.

The Finance Department said the deeper deficit is largely driven by changes to how employee pensions and benefits are calculated — a hit that grows when interest rates are low, but could drop sharply when interest rates rise.

The Liberals’ election platform projected four years of deficits of more than $20 billion, including almost $27.4 billion in 2020-21.

Experts and the parliamentary budget officer suggested the government’s fiscal wiggle room had suddenly narrowed considerably, particularly if the economy slows down.

The budget officer suggested in its review of the fiscal update that the Liberals have run deficits between $18 billion and $28 billion, which may act as an “implicit fiscal anchor” for Morneau. The finance minister didn’t say how deep a federal deficit he would be comfortable seeing.

“The hypotheticals about what might or might not happen in the future are very dependent on where we go in the economy,” Morneau said on Global’s The West Block.

“We expect strong growth that will allow us to continue to make these investments.”

Morneau said in the interview that the Liberals planned to focus on maintaining the country’s triple-A credit rating, keeping that “fiscal firepower” as Trudeau has asked and making sure the national debt declines as a percentage of the overall economy.

He also said the Liberals would continue spending on things that matter to Canadians.

The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Prince Rupert Lions Club donated $11,500 to several local organizations from the proceeds of the 28th annual Blue Knuckle Derby on Jan. 18. (Photo: supplied)
Local organizations benefit from Blue Knuckle Derby

Prince Rupert Lions Club donates $11,500

The Port of Prince Rupert has experienced another year of increased cargo volumes, shipped through the city, with more than $50 billion in international trade facilitated through the area, the Port Authority announced on Jan. 18. (Photo: K-J Millar/The Northern View)
Port cargo volume growth continues despite pandemic obstacles

Prince Rupert Port authority announces $50 billion in international trade

The IIO B.C. is seeking witnesses to an arrest made in Penticton on Nov. 8, during which the male resisted and sustained a head injury. (File Photo)
The Independent InvestigationsOffice of B.C. released a report on Jan. 18 that a Prince Rupert RCMP officer is cleared of any serious harm wrongdoing from a May 29, 2020 incident. (File Photo)
Police watchdog investigation clears Prince Rupert police officer

IIO investigated May 29 incident where woman fell 25 metres in Prince Rupert

Face masks are required to be worn in all SD 52 common areas such as hallways. School District 52 announced on Jan. 15 three different schools in Prince Rupert all had a member of the school community test positive for COVID-19. (Photo: K-J Millar/The Northern View)
3 Prince Rupert schools have positive COVID-19 case(s)

Letters sent home to families in three Prince Rupert schools announcing COVID-19

B.C. Representative for Children and Youth Jennifer Charlesworth (Black Press files)
B.C. watchdog says mentally ill children and youth retraumatized in hospital

The number of children held under the Mental Health Act has increased an alarming 162 per cent in past decade

A new video from NCCIH and BC Northern Health titled ‘Healing in Pandemic Times: Indigenous Peoples, Stigma and COVID-19’ was animated by Joanne Gervais. (Photo Provided By: NCCIH Archives)
VIDEO: Stigma against Indigenous people is a ‘social sickness’

A new short animated video is aiming to educate the public on the stigmatization

A pinniped was attacked by an unseen predator off the shores of Dallas Road Monday night. (Courtesy of Steffani Cameron)
VIDEO: Seal hunting, not being hunted in video shot off Victoria waterfront

Victoria woman captures footage of pinniped activity off Dallas Road

Prime Minister Justin Trudeau provides an update on the COVID-19 pandemic from Rideau Cottage in Ottawa on Tuesday, Jan. 11, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Prime Minister Justin Trudeau provides an update on the COVID-19 pandemic from Rideau Cottage in Ottawa on Tuesday, Jan. 11, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Trudeau vows to keep up the fight to sway U.S. on merits of Keystone XL pipeline

Canada’s pitch to the Biden team has framed Keystone XL as a more environmentally friendly project than original

The British Columbia Hotel Association (BCHA) sent out a sharply worded release late last week, in which it noted that the Tourism Industry Association of BC recently obtained a ‘legal opinion’ on the matter (Alex Passini photo)
Hotel associations push back against any potential ban on inter-provincial, non-essential travel restrictions

B.C. Premier John Horgan is seeking legal advice on banning non-essential travel

JaHyung Lee, “Canada’s oldest senior” at 110 years old, received his first dose of the COVID-19 vaccine on Thursday, Jan. 14, 2021. He lives at Amenida Seniors Community in Newton. (Submitted photo: Amenida Seniors Community)
COVID rapid tests in long-term care key during vaccine rollout: B.C. care providers

‘Getting kits into the hands of care providers should be a top priority,’ says former Health Minister

Island Health chief medical officer Dr. Richard Stanwick receives a first dose of Pfizer vaccine, Dec. 22, 2020. (B.C. government)
B.C. turns to second doses of COVID-19 vaccine as supplies slow

Pfizer shipments down until February, to be made up in March

B.C.’s Ministry of Advanced Education and Skills Training announced funding to train community mental health workers at four B.C. post-secondary institutions. (Stock photo)
B.C. funding training of mental health workers at four post-secondary institutions

Provincial government says pandemic has intensified need for mental health supports

A health-care worker prepares a dose of the Pfizer-BioNTech COVID-19 vaccine at a UHN COVID-19 vaccine clinic in Toronto on Thursday, January 7, 2021. THE CANADIAN PRESS/Nathan Denette
No Pfizer vaccines arriving in Canada next week; feds still expect 4M doses by end of March

More cases of U.K. variant, South African variant found in Canada

Most Read