- ‘Day of reckoning’: CIBC
- Donald Trump as poet
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Still months to go but ...
Canada’s Liberal government faces “a day of reckoning,” largely on economic and business issues, one of the country’s major banks believes.
We’re still months away from an October election, and, obviously, anything could and probably will happen. But it’s already shaping up to be a tight race with many hot-button issues, CIBC World Markets said.
Among them are pipelines, the proposed new trade pact with the U.S. and Mexico, business competitiveness, and the “substantial pushback from many provinces” on Ottawa’s climate change plan, said Maria Berlettano, the bank’s head of Canadian government credit strategy.
“A day of reckoning is coming for Justin Trudeau’s Liberal government,” Ms. Berlettano said in a CIBC outlook released Monday, which considered everything from the economy and commodities to interest rates and the Canadian dollar.
That political comment was a rare pronouncement by one of the big banks.
In an interview, Ms. Berlettano said the bank wouldn’t speculate on election results.
“We looked at the polls and just stated the facts,” she said. “It’s really, really early days.”
In her report, Ms. Berlettano ran through the record of the Liberals since they won a majority and ousted the Conservatives “at a time when the Canadian economy was being ravaged.”
The Liberals, remember, campaigned on deficits that would buoy the economy, while the Tories were still in austerity mode.
The Liberals quickly unveiled middle-class tax cuts, a new child benefit, an infrastructure program and more. With accompanying budget deficits.
Most recently, in his fiscal update, Finance Minister Bill Morneau unveiled tax changes to help businesses better compete after the Trump administration’s tax reforms.
“Notwithstanding the shift to multiyear deficits, the government has been carefully managing a gradually declining net debt/GDP and is well positioned to protect its AAA-rating,” Ms. Berlettano said.
There’s another aspect noted separately by Bank of Montreal, which cited a drop of 11.2 points, the steepest in three years, in The Conference Board of Canada’s consumer confidence index in December.
That index lost more than 25 points last year, and is now at its lowest in two years.
“And, it’s no wonder amid gyrating financial markets, rising interest rates, moderating economic growth, a cooling housing market and a faltering oil sector,” said BMO economic analyst Priscilla Thiagamoorthy.
“The steep decline does come at an interesting time though, as Canada enters an election year,” she added.
“Despite solid employment gains and lower gasoline prices, consumers are now far less optimistic about the outlook than a year ago, with a slew of uncertainty still ahead.”
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Trump as poet
Imagine if President Donald Trump takes this to heart when he addresses the nation tonight …
The government’s shut down
So I’m ordering Pence
To move Heaven and Earth
So I can have my damn fence
Trade gap swells
Canada’s merchandise trade deficit widened sharply in November to $2.1-billion as a drop in exports eclipsed that of imports.
Exports slipped 2.9 per cent as imports declined 0.5 per cent, fattening up the gap from October’s $851-million, Statistics Canada said today.
Crude exports were the big culprit here as prices fell almost 14 per cent.
Over all, Canada’s export volumes declined 1.8 per cent, and prices 1.1 per cent.
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From today’s Globe and Mail
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