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

As part of Earth Week, Ucluelet Rotary Club member Ryan Wackett will be handing out free Clean Up Packages with grabber picker up tools at his shop Westcoast Connect from April 10 to 23. (Nora O’Malley photo)
Ucluelet Rotary honours Earth Day with week long community clean up

“Let’s spring into action and clean up our beautiful communities!”

Hwy. 4 was shut down in both directions for 10 hours on March 23 as a rock bluff was blasted as part of Kennedy Hill’s ongoing construction. Commuters can expect five more 10 hour closures on five consecutive Wednesdays beginning April 28. (Photo courtesy of Ministry of Transportation and Infrastructure)
Five 10-hour closures coming to Hwy. 4 between Port Alberni and Tofino-Ucluelet

Closures needed for rock blasting as part of the Kennedy Hill Safety Improvement project.

B.C. Centre for Disease Control maps showing new COVID-19 cases by local health area for the week of April 4-10. (BCCDC image)
Parksville-Qualicum passes Nanaimo in new COVID-19 cases

Greater Victoria had more new cases than any other Island area: B.C. Centre for Disease Control

A screenshot from a Nuu-chah-nulth healing song and performance created in collaboration between Hjalmer Wenstob and Timmy Masso. (Screenshot from YouTube)
WATCH: Tla-o-qui-aht First Nation brothers produce COVID-19 healing song and performance

Hjalmer Wenstob and Timmy Masso share dance and inspiration.

Ucluelet locals Rachael, Caroline and Tom enjoy refreshments on a sunny Monday afternoon at a picnic table dining area set up by the District of Ucluelet to help residents and visitors support local businesses while staying outside. (Andrew Bailey photo)
Ucluelet chamber launches bingo contest to support local restaurants

Four Ucluelet Co-op shopping sprees are up for grabs in #Ukee2go competition.

Rainbow trouts thrashing with life as they’re about to be transferred to the largest lake of their lives, even though it’s pretty small. These rainbows have a blue tinge because they matched the blue of their hatchery pen, but soon they’ll take on the green-browns of their new home at Lookout Lake. (Zoe Ducklow/News Staff)
VIDEO: B.C. lake stocked with hatchery trout to delight of a seniors fishing club

The Cherish Trout Scouts made plans to come back fishing soon

The Nanaimo Clippers’ game against the Alberni Valley Bulldogs slated for Thursday, April 15, has been postponed due to a “potential positive COVID-19 test result,” says the BCHL. (News Bulletin file photo)
Nanaimo Clippers COVID-19 test negative, team can practise and play

Junior A hockey team had suspended activities the day before out of ‘abundance of caution’

Paper Excellence took over Catalyst Paper operations in B.C. in 2018. (Paper Excellence photo)
The plane blasted through an airport fence and down a hill, before stopping before a cement barrier on Highway 5A, right in front of a school bus. Photo submitted.
Student pilot crashes plane onto Highway 5A almost hitting school bus

Aircraft hit pavement right in front of school bus

Eight-year-old Piper and her family were raising money to help Guinevere, the bearded dragon, get a gynecological surgery. Sadly, the reptile didn’t survive the procedure. (Jackee Sullivan/Special to Langley Advance Times)
Lizard fails to survive surgery, GoFundMe dollars help Langley family offset medical bills

Guinevere, a pet bearded dragon, underwent an ovariectomy on Tuesday

A driver stopped by Saanich police following a road rage incident on April 15 was found to be impaired, in violation of a license restriction and in a damaged vehicle. They received a 90-day driving prohibition and a 30-day vehicle impound. (Saanich Police Traffic Safety Unit/Twitter)
Road rager fails breathalyzer on busy B.C. highway in vehicle he shouldn’t be driving

Saanich police say man was operating vehicle without required ignition lock

The family of Iris McNeil, shown here with members of her family, has launched a petition to deny parole for the man who murdered McNeil in 1997. (Family photo)
Family fights killer’s release from Vancouver Island prison

Shortreed serving an indeterminate sentence at William Head Institution

B.C. Premier John Horgan wears a protective face mask to help prevent the spread of COVID-19. THE CANADIAN PRESS/Jonathan Hayward
B.C. Premier John Horgan booked to get AstraZeneca shot Friday

‘Let’s show all British Columbians that the best vaccine is the one that’s available to you now,’ he said

Most Read