Federal Finance Minister Bill Morneau announced during Tuesday’s question period that he will introduce the federal government’s latest budget on March 22, his first amid the economic uncertainty of the Donald Trump era.
The 2017 federal budget is one that will “create jobs and invest in our communities,” as well as “ensure our success in the economy of the future,” Morneau said.
The budget, the Liberal government’s second since the 2015 election, will land as Ottawa and corporate Canada scramble to assess the risks of possible and unpredictable policy actions from the country’s top trading partner.
Morneau, however, was far more interested in talking about how the budget will be a blueprint for navigating an evolving high-tech economy than he was about uncertainty south of the border.
“It will be about how we can help Canadians get the skills that they need in a dynamic and changing economy,” he said after question period.
“It will be really about thinking about how we can turn challenges into opportunities,” he added. “That’s our goal this year: to make our economy more innovative and prepare Canadians for that exciting opportunity.”
There are fears of negative economic fallout for Canada from the decisions of the Trump administration, and it’s unclear whether Morneau’s budget will account for the unknowns.
Trump calling cards such as a border tax, protectionist policies, corporate and personal tax cuts and a renegotiated North American Free Trade Agreement all pose an economic danger north of the border.
“The measures that we’re putting forth are a continuation of what we’ve done to continue to help working-class Canadians,” Morneau said when asked about how the budget would navigate such uncertain variables.
“There’s no doubt that the global situation is important, the level of global growth is important to our economy, it’s important to us to have a good understanding of our situation here in Canada compared to the rest of the world,” he added.
“But with our program, we will be introducing measures that will boost our level of growth, and that will be important for all Canadians,” Morneau said.
The budget will also follow a series of stronger-than-expected economic indicators in recent weeks. In November 216, Morneau’s autumn fiscal statement predicted a deficit of $25.1 billion this year and a shortfall of $27.8 billion for 2017-18.
But even with the encouraging results of late for indicators such as job creation and trade, Conference Board of Canada chief economist Craig Alexander says the “slightly” better outlook since the start of the year still has a huge cloud hovering above it.
“In the wake of the election victory by Trump, a lot of uncertainty was introduced into the economic forecasts,” says Alexander, who participated in Morneau’s Jan. 13 meeting to hear projections from private-sector economists.
Trump’s famous unpredictability means it’s impossible to know for sure the challenges Canada could end up facing, he adds.
“When we actually have the budget, it will be interesting to look at it in a lens of how has the Canadian government responded to potential Trump issues,” Alexander adds. “That’s not normally the way we read a budget.”
The Trudeau government has been criticized since last year’s budget for not outlining when it will bring the federal books back to balance following a string of projected annual, double-digit shortfalls until at least 2021-22.
The Liberal government cited a weaker-than-expected economy last year when it abandoned several firm fiscal benchmarks that the party gave prominence during the 2015 election campaign.
The Liberals ditched pledges to run annual deficits of no more than $10 billion and to balance the books in four years. Instead, they have focused on reducing the debt to gross domestic product ratio — also known as the debt burden — below the current level by 2019-20.
The Liberals have laid out a plan to run deficits as a way to invest billions into economy-boosting infrastructure projects over the coming years.
Morneau has reiterated that the government would be “fiscally responsible.”
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