Prime Minister Justin Trudeau and Minister of Finance Bill Morneau have both downplayed Canada’s economic uncertainty going into the new year.
During an end-of-year interview with CTV’s Lisa Laflamme, Justin Trudeau said that he disagreed with economists who are questioning the Liberal government’s fiscal policy.
“I actually disagree with those economists,” Trudeau said.
“We’ve been very careful to keep our debt low as a share of our economy.”
In the recent fiscal update, it was revealed that the government ran a $26.6 billion deficit in 2019, nearly $7 billion higher than was estimated. The deficit in 2020 is estimated to be $28.1 billion.
Many economists fear Canada may not be prepared for a recession as economic growth appears sluggish. Earlier in December, the Bank of Canada Governor Stephen Poloz warned global economic growth looks to be slow for the foreseeable future.
Oxford University economists also predict Canada has a 40% chance of a recession in 2020.
Conservative Finance Critic Pierre Poilievre warned last week that the Liberal’s spending may be sending Canada towards a “made-in-Canada” recession.
On CTV’s Question Period, Finance Minister Bill Morneau said that Conservatives should avoid using “irresponsible” claims when the economy is growing.
The fiscal update estimates that the Canadian economy will grow by 1.7% in 2019 and 1.6% in 2020. By comparison, the US economy grew by about 2.4% over the first three quarters of 2019.
“I think it’s a little bit irresponsible of the Conservatives to be making people more anxious,” Morneau said.
While Morneau appears unconcerned about possible economic uncertainty, recent opinion polling suggests that the majority of Canadians believe a recession is either “likely” or “somewhat likely.”
The loss of 71,000 jobs in November and a large rise in insolvencies in late 2019 indicate that the Canadian economy may not be on stable ground.
Morneau says that while the government will be careful, they are confident the Canadian economy will be strong in 2020.
“We need to play our hand cautiously, but I see the economy as strong and I see it as growing,” he said.
