Finance Minister Bill Morneau will release the government’s first fiscal update since the October election next week, just hours before he fields demands for more money from his provincial and territorial colleagues.
The Monday morning update is not expected to contain any new policy announcements, unlike some of Mr. Morneau’s past fall updates. Instead, it will be a traditional updating of the Finance Department’s forecasts for federal revenues and expenses.
The last formal projections were in Mr. Morneau’s March budget, which said the deficit for this fiscal year, which ends in March, would be $19.8-billion, followed by a $19.7-billion deficit in 2020-21. Since then, private-sector forecasters have lowered their projections for economic growth for this year and next and the Liberals have announced additional spending plans during the fall election campaign.
The more recent numbers in the Liberal Party platform said the 2020-21 deficit would be $27.4-billion. It also said deficits for the following three fiscal years would be $23.7-billion, $21.8-billion and $21-billion.
On Friday, Prime Minister Justin Trudeau released the mandate letters for federal cabinet ministers. Mr. Morneau’s revealed new details regarding the government’s fiscal plans.
The Finance Minister is being asked to follow four key principles: He must continue to reduce the ratio of the federal debt to gross domestic product; preserve Canada’s AAA credit rating; make investments that improve Canadians’ quality of life; and to “preserve fiscal firepower" so that the government has the financial capacity to increase spending in the event of an economic downturn that requires fiscal stimulus.
On Monday evening, Mr. Morneau is scheduled to play host to a dinner in Ottawa with his provincial and territorial counterparts for the annual December meeting of finance ministers. That will be followed by a day of meetings Tuesday. Mr. Morneau has agreed to a request from Alberta and Saskatchewan to discuss a possible expansion of the fiscal stabilization program, which is a form of emergency federal aid that can be offered when a province experiences a sharp and sudden economic decline.