OTTAWA – Finance Minister Bill Morneau says the government's continued spending without a clear path to balance the budget is the right approach for the current economic situation, saying the Conservatives' suggested approach to fiscal management would mean cuts, job losses, and stagnant growth.
In an interview on CTV’s Question Period, Morneau defended the long-broken promise of Prime Minister Justin Trudeau to balance the budget by 2019 and never run a deficit larger than $10 billion.
"The Conservatives would say, 'rapidly reduce the amount that we're putting into the economy.' So get to balance much more rapidly… They're saying do that which would lead to cuts in services, it would lead to higher unemployment, it would lead to lower growth, so it actually would be self-defeating," Morneau said.
"What we're saying is we can take a balanced approach, we can continue to ensure that we're competitive at the same time as we reduce the amount of debt as a function of the economy. We need to do both those things at the same time, that will allow us to continue to have the positive results that we that we haven't experienced over the last few years."
This week, Morneau tabled the 2018 fall economic update unveiling a three-pronged plan to encourage Canadian competitiveness that will push the federal deficit up for years to come, hitting $19.6 billion next year. This is up nearly $2 billion from the $17.8 billion projected deficit for that year prior to the fall economic update.
2019 was supposed to be the year that the Liberals balanced the books. Now, the deficit is projected to drop over the next four years, down to $11.4 billion in 2023-24.
"We've maintained that debt as a function of our economy, and we're lowering it over time," Morneau said.
In the interview, Morneau said his focus will remain on maintaining his current approach, saying that it has worked so far and the economy is showing positive indicators.
As stated in the updated economic report card, the economy is expected to grow by 2 per cent in 2018, will stay the same in 2019, and drop below 2 per cent in 2020 to 1.6 per cent.
As well, the debt-to-GDP ratio is shrinking, but not as quickly as once thought. It's currently projected at 30.9 per cent.
"So we've got a very, very positive balance sheet. That's the frame. And what we need to do is maintain that and that's what we're doing, we are reducing that debt as a function of GDP, we need to keep on that track," Morneau said.
Though, also appearing on CTV's Question Period, Deputy Conservative Leader Lisa Raitt said the Liberals are overspending, and expressed concern about the way money is moving around within the budget.
Media money
As part of the fiscal update, the governing Liberals also announced new measures for Canada’s journalism sector, including setting aside $595 million over the next five years for a temporary 15 per cent tax credit for people who subscribe to eligible digital news media, and creating a new refundable tax credit for both non-profit and for-profit news organizations.
Though, the details of these new initiatives will not be released until the next federal budget.
This is something Conservative MPs have pounced on, saying the Liberals are trying to bribe the media before next election and questioning how it might impact journalists' objectivity.
"I think what my colleagues are talking about, what the concern is, is what it looks like optically going forward," Raitt said.
The Liberals have called this an offensive and partisan suggestion, and Morneau took things a step further in the interview, saying it's implausible that this support will change how journalists conduct themselves and report the news.
"Let me just give you a little bit of my experience being in this role. I haven't found it plausible or possible in any way to actually get journalists to say what I want them to say," Morneau said.
"I'd like it if the next time we're together I can ask you to say exactly what I want but doesn't seem to be the way it works. We just think that a strong free press is essential for a strong democracy," Morneau said.
