Fall Economic Statement
November 3, 2016
This week, Liberal Finance Minister, Bill Morneau presented an update on the economy and the government’s finances for the next five years. He announced that forecasts for GDP growth have been downgraded and he unveiled new spending and policy initiatives related to infrastructure, immigration programs and foreign investment attraction.
During the 2015 federal election campaign, Justin Trudeau had promised Canadians that if he borrowed billions of dollars, a Liberal Government would be able to create jobs and grow the economy. This has not happened. Now, the Liberals have decided to double down on their unsuccessful plan.
In his update this week, Minister Morneau announced that the Liberal Government will be borrowing an extra $32 billion over the next five years with not even a mention of a return to balanced budgets. In fact, it appears that even their previous long term plan to balance the budget has been completely abandoned. Their only solution to problems seems to be to borrow and spend even more money—money that will have to be paid back by Canadian workers, families, and job creators.
With this government’s increased deficit spending, our economy continues to struggle. In fact, since the Prime Minister was elected, the economy hasn’t created a single additional full time job. Finance officials confirm that GDP growth will be lower compared to the projections in Budget 2016 (from 1.4% to 1.2% in 2016 and 2.2% to 2% in 2017).
The Economic Statement also announced $15 billion to go to capitalize the new Canada Infrastructure Bank. The Bank will use this capital along with $20 billion in additional equity and debt commitments from the federal government (at no fiscal cost) to fund infrastructure projects with the potential to generate revenue and attract private investment. With these new initiatives, the government is hoping to attract foreign investment into Canada to help deliver results. However, a sluggish and unstable economy with higher taxes and ever-increasing debt will certainly not be attractive to foreign investment. Upon coming into office last year, the Liberals also promised an increased focus on infrastructure. On this promise as well, we see that they have failed. Of the 860 infrastructure projects approved by the Liberals so far, only a few have broken ground.
All of this is in complete contrast with the former Conservative Government under then Prime Minister Stephen Harper. While in government, we managed to deliver record infrastructure funding for Canadian communities.
The Fall Economic Statement is yet another sign that the government’s growth plan is not delivering results. The Liberal fiscal update further proves that the out-of-control spending Liberals are back.