Fiscal update to lay out competitiveness plan, close loop on some Liberal vows
The federal government will release a fall economic update Wednesday that will seek to close the loop on some of its outstanding mandate commitments, leaving the door open for the Liberals to use next year’s budget as their 2019 election platform.
The document will also include Finance Minister Bill Morneau’s long-awaited plan to help Canada compete for investment dollars, which many warn has become increasingly difficult following major tax and regulatory changes in the United States.
Morneau has faced pressure to lower Canada’s corporate rate, but the government has signalled it will focus on targeted measures to accelerate investment rather than across-the-board tax cuts.
The document will likely be the Liberal government’s second-last opportunity — besides the spring budget — to deliver major policy announcements and its political pitch in package form before the October 2019 election.
As for fiscal responsibility, the official said the fall statement will show that Canada’s annual projections for the federal deficit and the debt burden will continue to slide downward on trajectories similar to those outlined in the 2018 budget.
The Liberals have faced regular criticism from the Opposition Conservatives for abandoning their 2015 vow to run only modest annual shortfalls of no more than $10 billion and to eliminate the deficit by 2019.
Instead, the Liberals have posted deficits of more than $18 billion in each of the last two years.
As its guiding principle on fiscal responsibility, the government has focused on lowering the country’s debt burden — as measured by net debt-to-GDP — rather than balancing the books.
The debt-to-GDP ratio fell to 31.3 per cent in 2017-18 from 32 per cent in 2016-17. The government has predicted the ratio to fall to 30.1 per cent in 2018-19 and continue sliding each year until it reaches 28.4 per cent in 2022-23. (Source: CTV News)