Finance Minister Bill Morneau is expected to announce the date of the Liberal government’s much anticipated first budget Monday when he delivers an update on federal finances and outlines broad themes for moving Canada toward a more innovative economy.
Department officials have scheduled a technical briefing for reporters at 9:30 Monday morning that will be followed by a town-hall meeting where Mr. Morneau plans to speak about the government’s long-term plan for the economy, with a special focus on improving the lives of those in the middle class.
Mr. Morneau’s budget is expected to be unveiled in the week of March 21 and will include billions of dollars of infrastructure spending to kick-start a sputtering economy.
The technical briefing will explain the current economic situation since the November economic update when the finance department predicted growth of 2 per cent in 2016, based on private-sector forecasts at the time. Officials are expected to predict growth of about only 1.4 per cent as a result of lower federal revenue, caused by the steep drop in oil prices.
Mr. Morneau will use a town-hall setting in the working class Ottawa suburb of Vanier to speak about a new long-term approach to generating wealth through innovation, enhanced productivity, green technology and helping the middle class, whose incomes have largely remained stagnant over the past decade.
“The minister’s speech will be much more high level, much more about the challenges facing the middle class. This is our new approach. The government of Canada has a fundamentally new approach to this economy,” said an official, speaking on background. “The recent downturn makes that plan even more important than ever.”
Mr. Morneau is expected to turn away from the austerity policies of the former Conservative government and proclaim the benefits of an activist government willing to splurge on investments in an innovative economy.
This is a theme that Prime Minister Justin Trudeau addressed at the World Economic Forum in Davos, Switzerland when he described Canada as an “engine of invention” that rivals Silicon Valley with excellent universities and a strong high-tech sector that can take advantage of the next technological revolution.
“We believe in investing in the economy and planning long-term growth and that is the core of what we are up too,” the official said. “This is a new approach by the government.”
The Finance Minister is not expected to reveal the size of the deficit until the budget is tabled, which Mr. Trudeau suggested in private closed-door remarks in Davos could be as high as $25-billion.
The Liberals campaigned on running annual deficits of $10-billion over three years to revive the economy, with spending targeted on infrastructure that would improve the country’s productivity and innovation. The Liberals promised the country would be in the black by 2019-20 but has since backed off that pledge while still vowing to shrink the federal debt in relation to the size of the economy.
Mr. Moreau, a rookie at finance but a well-respected Toronto business executive, is facing intense pressure from cities, the provinces, interest groups and from his own cabinet colleagues seeking federal money in the budget.
Quebec is seeking $1.4-billion to help bail out Montreal aerospace giant Bombardier while hard-hit Alberta is looking for Ottawa to provide relief in the form of fast-paced adjustments to employment insurance.
“We have families in Alberta that need that support now,” Premier Rachel Notley told CTV’s Question Period with The Globe and Mail’s Robert Fife Sunday, while also asking for immediate infrastructure money to help the province.
The Commons Finance committee has been holding prebudget hearings and Mr. Morneau will make his first appearance on Tuesday where he is expected to be grilled by Conservative and NDP MPs for details of his spending plans.Report Typo/Error