Finance minister Morneau paints a bleak picture of economic growth
The minister said there's hope that oil prices will improve, but a declining tax base means his department is expecting a $15-billion-per-year reduction of GDP
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HALIFAX—The federal finance minister spoke of pitch-black moments in his morning shower and some darkening clouds for the Canadian economy as he kicked off his national budget consultation tour in Halifax on Monday.
Bill Morneau drew chuckles from a business audience at the Halifax Chamber of Commerce as he described a morning power outage that occurred while he was covered in soap lather.
The minister said it’s just the latest in a series of challenges he’s facing as he sets out to prepare his first budget amidst a declining economy.
Within a few minutes of beginning his speech, Morneau launched into a series of slides that painted a bleak picture of economic growth hampered by plunging commodities prices.
He repeated prior statements that the Canadian economy is suffering from slower growth than originally projected by the former Conservative government due partly to oil prices that are less than half those of 2014.
“We knew when we were campaigning we were facing a slow-growth environment,” he said.
“The challenge is greater than we expected.”
The minister said there’s hope that oil prices will improve, but as it stands a declining tax base means his department is expecting a $15 billion per year reduction of GDP beginning this year, compared with what was projected in the last budget.
“It’s important to have a frank view of where we’re starting from,” he said.
Morneau is travelling across the country this week to seek input as he draws up his first federal budget.
The finance minister spoke on the same day as the Bank of Canada’s latest business outlook survey was released indicating companies’ investment in equipment and hiring intentions for the next year are tumbling to their lowest levels since the 2009 recession.
The former executive chairman of a human resources firm told reporters the survey indicates his party’s infrastructure spending will assist in retaining business confidence.
He also repeated the party will keep its campaign promises to bring in middle class tax breaks and spend billions on infrastructure.
But during a news conference, Morneau offered few details when local reporters asked about how Ottawa will stimulate the Nova Scotia economy and help with the upkeep of aging infrastructure.
He said he couldn’t comment on whether the number of federal ships being built in Halifax yards will remain.
He also said he had little information about the Victoria General, an aging Halifax hospital beset by routine floods and leaks, and couldn’t say whether helping fix the problem falls within the planned infrastructure spending.
Randy Delorey, Nova Scotia’s Liberal minister of finance, said in an interview he’s content to wait for more details about how his federal counterpart’s infrastructure program will work _ and whether he can ask for help with the decrepit facility.
During a news conference, the federal minister was also asked whether Ottawa will continue efforts by the former Conservative government to create a national securities regulator.
He said his government will work with provinces who want to create the regulator, but respected that Alberta and Quebec weren’t interested in proceeding with the plan.
“We do favour a collaborative national securities regulator,” he said. “We recognize we’ll do this together with those provinces willing to be part of this initiative. We think it’s important for Canada find a way to be efficient in all things we do.”
Late in the day, the minister answered a wide-ranging series of questions from students at Dalhousie University, the first of series of forums that will be held at universities.