Canadian economy set for ‘turbulent’ year, says Deputy Finance Minister – National | PKBNEWS

Canada’s deputy finance minister says it’s going to be a ‘turbulent’ year for the economy, but Randy Boissonault insists the government still has some leeway on key priorities, including a new deal on health care with the provinces.


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Boissonnault was speaking ahead of the cabinet meeting at the second of a three-day cabinet retreat in Hamilton, Ont. Finance Minister Chrystia Freeland is expected to give the cabinet an economic update later on Tuesday.

“There’s a lot of uncertainty,” Boissonnault said. “So we will be watching that every step of the way as we prepare for the budget (2023). We still have fiscal space to be able to do the things we need to do, but the fiscal space has tightened.

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He said the war in Ukraine and inflation were among the problems causing both uncertainty and economic damage.

On Monday, a joint report from the Business Council of Canada and Bennett Jones warned that the fiscal projections presented in the latest federal budget and fall economic statement were likely too optimistic.

The report, written by former Bank of Canada Governor David Dodge and former Liberal financial policy adviser Robert Asselin, said the government’s forecast was based on a “plausible but optimistic” set of economic assumptions and interest rates that are unlikely to materialize.

They warn that there is a “high likelihood of a deeper recession” this year and that Liberal promises on everything from health care funding and increased national defense spending to infrastructure improvements and climate change, will cost much more than expected.

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Boissonnault said the report is one of many the government will consider when making its economic forecast ahead of the next budget. He said he thinks the fiscal reality will be somewhere between the best and worst scenarios presented in the fall economic statement.

Prime Minister Justin Trudeau has said Canada’s affordability and competitiveness are his priorities ahead of this cabinet meeting.

Ongoing talks with the provinces for a new health funding arrangement are also front and center and one of the issues that could alter the government’s spending plans. Provinces have asked for billions over the next decade to pull their health care systems from the brink of collapse.


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Ottawa insists on responsibility for any new health funding and Trudeau has not publicly committed to meeting the demands of the premiers.

Trudeau started his day Tuesday by meeting with Hamilton Mayor Andrea Horwath, the former leader of the Ontario NDP. The couple said housing was among their main topics of conversation.

Housing prices and the lack of affordable housing in particular have become a key issue for governments at all levels.

The cabinet meeting in Hamilton comes as it prepares for Parliament to return next week. The industrial city, known primarily as a steel town, is also one of the most politically competitive, especially between the Liberals and the NDP. The Liberals won three of four seats in Hamilton proper in 2021, edging out the NDP by a seat that party has held since 2006.

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The Cabinet has also been given a stark reminder of the strong opposition they face in a group known as the “freedom convoy”. A small protest greeted Trudeau on Monday afternoon upon his arrival.

A larger group, around three dozen or so, returned in the evening, where they waved flags, shouted and set off fireworks – some of which appeared to be aimed at the building.

Most dissolved by 11 p.m., but at least one protester spent most of the night honking, reminiscent of the air horns from the big rigs that blocked much of downtown Ottawa for three weeks almost a year ago.

The coming weekend will mark the first anniversary of the convoy’s arrival in Ottawa. The week-long blockage and accompanying blockades at several border crossings prompted Trudeau to invoke the Emergencies Act for the first time since it replaced the War Measures Act in 1988 .

The final report of the public inquiry into this decision is expected in February.

&copy 2023 The Canadian Press

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