Finance Minister Joe Oliver has circled April 9 as the date for his final meeting with private-sector economists before the Conservatives deliver the 2015 pre-election budget.
The federal government – which announced in January that it would delay the release of the budget until at least April because of the rapidly changing economic landscape – has not yet set a date, but last year’s pre-budget meeting with economists took place two weeks before the 2014 budget was released on Feb. 11.
On Monday, a spokesperson for the minister confirmed the meeting date and said it will take place in Ottawa.
The Conservative government’s plans for delivering a good-news budget have faded along with the price of oil. Bank of Canada Governor Stephen Poloz did not help with the government’s positive messaging, telling the Financial Times: “The first quarter of 2015 will look atrocious, because the oil shock is a big deal for us. In theory, lower oil prices mean [putting] more money in consumers’ pockets, but…if an oil company cancels [an investment] project, laying off a worker, that guy will not have the money to buy a new pickup truck. That spreads pretty quickly.”
The opposition NDP and Liberals seized on the comments Monday in the House of Commons as they continued to criticize Mr. Oliver for delaying the federal budget.
Mr. Oliver told reporters following Question Period that Mr. Poloz’s comments reflect the impact of lower oil prices, but noted that growth is expected to improve – Mr. Poloz did say there are positive signs in manufacturing and exports.
“The governor also said that he expects a stronger recovery in the latter part of the year,” Mr. Oliver said. “I mean, that of course has been ignored, you know, because of his comments about the early part of the year, but we’ll see how it goes. But we’re definitely expecting growth to start re-emerging because of the strength in the U.S. economy.”
When Mr. Oliver announced the delay in releasing the budget in January, the price of oil had dropped by more than half since the summer. The price of North American crude has continued to hover around $50 (U.S.) a barrel. The federal government’s most recent official fiscal update, on Nov. 12, was based on an assumption of oil prices holding at $81 (U.S.) per barrel.
Mr. Oliver has not said whether he will use the current – or spot – price for the 2015 budget assumptions.
Economists submitted their latest forecasts to Finance Canada earlier this month. The meeting will provide an opportunity to discuss more recent economic data.
Finance Canada relies on an average of private-sector forecasts to produce its underlying assumptions for economic growth and government revenues. Finance tends to adjust that average downward as a form of prudence in case actual results fail to meet expectations.
One of the private-sector economists involved in the process, Ted Mallett of the Canadian Federation of Independent Business, sent Finance a forecast that pegs oil at $51.2 (U.S.) per barrel in 2015, rising to $64 in 2016, $68.8 in 2017 and $70 from 2018 to 2022.Report Typo/Error