OTTAWA – As debut performances go, Finance Minister Bill Morneau were able to stick close to the Liberal script on the need for deficit-fuelled stimulus spending, and avoided any major policy pratfalls, in his first appearance before Canadian lawmakers.
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While such events usually provide fodder for heated partisan debates, Morneau’s testimony to the House of Commons finance committee drew only limited criticism in the all-party committee, using the only real grilling coming – not surprisingly – in the Conservative finance critic who demanded to understand how the new Trudeau government were able to turn a Tory surplus, although meagre, right into a multi-billion-dollar deficit.
In his opening statement, Morneau said the government’s 2016-17 budget, to be tabled on March 22, will “create conditions for growth.” Those include campaign promises to sweeten child benefits and provide regulations for middle-class Canadians.
Already, the Liberal government is preparing Canadians for any string of deficits over its four-year mandate? beginning with a shortfall with a minimum of $18.4 billion within the coming fiscal year – not counting spending on infrastructure projects and other new programs, which many economists say will probably push to total shortfall to as much as $30 billion.
“There will be more to complete,” Morneau said. “Within the coming months, the government will build up a strong growth strategy made to deliver strong and sustainable growth that will benefit us all, and higher living standards for those Canadians. And we will deliver that strategy before year-end.”
Much of this work will fall to the newly created Advisory Council on Economic Growth, chaired by Dominic Barton, the head of worldwide consulting group McKinsey & Co. “Their the first is going to be finding methods to increase our productivity,” Morneau said. “So, as our demographics shift, we nonetheless continue to enjoy the highest possible standard of living. This really is long overdue.”
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Morneau said other political parties “who committed over the past election campaign to a balanced-budget-at-any-cost approach would be making cuts of many billions of dollars at exactly the wrong time.”
“This could have resulted in massive job losses in a time of already high unemployment. This would have resulted in program cuts at a time when regions and population segments need those programs most,” he added. “To be frank, this would have likely led us into another recession.”
But committee member Lisa Raitt, the Conservative finance critic, defended the Harper government’s handling from the economy, telling Morneau that “we handed a surplus, minister, in November and December of this year whenever you took control of.”
“You are eroding the extra which was handed for you by a Conservative government, which any deficit for that year 2015-2016 is clearly on the hands of the government.”
Morneau, however, strongly rejected that reading of the federal government’s fiscal position.
“In the last two months of the year, there exists a decrease in revenues and an rise in expenses. What that leads to is really a situation in which you cannot take a look at one half of the season, and definitely you can’t look at 30 days or another month and come to the conclusions about our situation,” he said.
“We took phone finances left us through the previous government and that we found that we’d be (put) into a deficit for twelve months 2015-2016.”
gisfeld@nationalpost.com
Twitter.com/gisfeld
