Economic statement

Thursday November 13, 2014

Thursday November 13, 2014Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Thursday November 13, 2014

Highlights from Canada’s fiscal and economic update

Finance Minister Joe Oliver delivered his annual fall update and five-year projection of the government’s fiscal situation on Wednesday.

Here are the highlights:

• A small deficit of $2.9 billion expected for the 2014-2015 fiscal year, the same as projected in the February budget.

• A small surplus of $1.9 billion expected for the 2015-2016 fiscal year, much smaller than the $6.4 billion projected last February mainly because of recent announcements for spending increases and tax cuts.

• Surpluses forecast to grow slowly every year after that: $4.3 billion in 2016-2017, $5.1 billion in 2017-2018, and $6.8 billion in 2018-2019.

• Government has set aside $3 billion in contingency funds every year, including the current fiscal year. If not needed, the money goes towards the debt.

• Lower oil prices this year translated into a $500-million hit to the bottom line in 2014-2015, and $2.5 billion per year over the 2015-2019 period.

• Federal debt will rise slightly to $615.8 billion in 2014-2015 before diminishing gradually over the next five years. As a percentage of the economy, the federal debt in 2014-15 is forecast to be 31.5 per cent of GDP, dropping slowly over the coming years to 24.3 per cent in 2019-2020.

• Overall federal tax burden drops to lowest level in 50 years for now, but personal income tax as a percentage of GDP expected to reach 7.1 per cent next year, up from 6.9 per cent this year, and 7.3 per cent in 2019-2020.

• The government has recommitted to introducing balanced budget legislation, a promise made initially more than a year ago in the 2013 throne speech.

• Economists told Ottawa to expect real growth of 2.4 per cent in 2014 and 2.6 per cent in 2015. Those projections were made in September before commodity prices tanked; the government has had to trim expectations for government revenue.

• The employment insurance account has a $3.8-billion surplus in 2014-2015, $3.9 billion in 2015-2016 and $4.5 billion in 2016-17 — allowing the government to stay in the black despite new spending and tax cuts. (Source: Hamilton Spectator) http://www.thespec.com/news-story/5024559-10-highlights-from-canada-s-fiscal-and-economic-update/

Meanwhile, A European robot probe has made the first, historic landing on a comet, but its status remains uncertain after harpoons failed to anchor it to the surface.

Officials said the craft may have lifted off the comet after touchdown before returning to the surface.

Lander project manager Stephan Ulamec said: “Maybe we didn’t just land once, we landed twice.” (Source: BBC News)

 

Friday, November 8, 2013

Friday, November 8, 2013By Graeme MacKay, The Hamilton Spectator – Friday, November 8, 2013

Ontario Liberals won’t worry about $11.7B deficit if economy slows

Ontario is on track to eliminate the $11.7-billion deficit in the next four years without worrying about cutting programs, Finance Minister Charles Sousa said today.

The Liberal government is prioritizing investments in jobs before meeting “short term targets” to balance the province’s books.

“Stronger economic growth and new jobs are the surest, fairest path to higher revenues and a balanced budget,” said Sousa in this year’s fall economic statement.

Sousa added that the uncertain and slow recovery from the global recession has led to $5 billion less in projected provincial revenues since 2010.

The province has revised its estimates of economic growth downward because of the U.S. government shutdown and more modest exports from Ontario. Souza now assumes real GDP growth will be 1.3 per cent in 2013 and 2.1 per cent in 2014.

He said the gloomier economic picture did not affect the deficit forecast.

Earlier Thursday at a Toronto conference on public-private jobs in Toronto, Premier Kathleen Wynne said the Liberals were not relenting on their goal to cut the deficit.

“It’s not that we are saying we’re abandoning that and we’re going to now just spend and invest,” she said. “We’re the leanest government in the country. We need to continue to make sure that we control spending in a rational way, but I am determined that we are not going to cut and slash the services that people need.” (Source: CBC News)

[slideshow_deploy id=’824′]

Saturday August 20, 2011

Saturday August 20, 2011Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Saturday August 20, 2011

Flaherty, Carney take cautious tone on economy

Bank of Canada governor Mark Carney told MPs on Friday that the turmoil working its way through financial markets will bring uncertainty, but the bank is ready to deal with any problems.

Carney was speaking to the Commons finance committee, which had asked him and Finance Minister Jim Flaherty to share their views on the outlook for Canada’s economy.

Jim FlahertyCarney took a cautious tone in his remarks, explaining that while there are many threats to growth, the central bank is monitoring developments closely and has not made any major changes to its outlook recently.

“The considerable headwinds are now blowing hard,” Carney said. “[But] the bank has a wide range of tools and policy options it will continue to employ [to deal with the crisis].”

Carney renewed his call for productivity improvements, noting that U.S. firms have invested heavily in becoming more productive while credit is comparatively cheap.

“Their actual investment in machinery and equipment is well above what’s happened in Canada,” he said.

He also said the Canadian dollar’s strength is compounding the current crisis for Canadian firms.

Inflation data released earlier Friday morning — which showed that Canada’s consumer price index fell to 2.7 per cent last month — is well within the parameters the central bank expected in its last monetary policy report, Carney said.  (Source: CBC News)