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Freeland presents December 14 financial update

OTTAWA – Canadians will soon receive updates on the federal finances and the government’s outlook for an economy facing high inflation, flooding in British Columbia and the appearance of a new variant of COVID-19.

Finance Minister Chrystia Freeland will give the update on December 14, just three days before MPs are scheduled to leave Ottawa for winter break.

Federal finances have failed during the pandemic as the treasury pumped out unprecedented amounts of aid. The government predicts the deficit last fiscal year will be $354.2 billion and close to $155 billion this year.

Higher oil prices among other economic factors are expected to boost government profits – UBC economist Kevin Milligan estimates the surplus could be as much as $10 billion – giving The Liberal Party a budget breather.

“Our government’s focus is on ending the fight against COVID and supporting our recovery from the COVID recession,” Freeland said in the House of Commons. “We know it’s important for Canadians that we be careful and transparent with our nation’s finances.”

Shortly after Freeland spoke, MPs voted to send the Liberal Party’s latest aid package for review by the committee, possibly on Monday.

Freeland will face a two-hour $7.4 billion plan to provide support to workers affected by the outage and targeted help to businesses. hardest hit.

The Liberals have promised $100 billion in stimulus spending, and pledged billions more in the election campaign, which has sparked warnings from experts that spending too much could fuel inflation. developed by increasing consumer demand at a time when the supply of goods cannot keep up.

“It seems to me that you combine this with all the savings Canadians have right now and that is a lot of money,” said Robert Asselin, senior vice president for policy at the Canadian Business Council. a lot of money in the economy in the short term,” said Robert Asselin, senior vice president for policy at the Business Council of Canada and a former Liberal budget director.

“You just want to be careful not to consume more fuel, demand more and make inflation worse.”

Rebekah Young, Scotiabank’s provincial director of finance and economics, said it would make sense to hold back the release of major portions of the $53 billion in new net spending pledged during the campaign, at least until the inflation rate starts to drop.

“I hope this spend still has a good chance of seeing the light of day, just not before the holiday,” says Young.

She said the announcements coming from the Treasury point to a minimalist update rather than one with lots of new spending measures.

Instead of spending, the Liberals are being asked to provide details on how to tackle supply chain problems that have sent inflation rates to an 18-year high, which is not in the outlook for the United States. government in the spring budget.

“It is important for them to map out their strategy to deal with these changing situations,” said Perrin Beatty, president of the Canadian Chamber of Commerce.

The government’s response to inflation is aimed at the national childcare strategy, which sets a target next year to cut the average rate in half and promises more spending to make housing affordable. more affordable prices.

Asselin said childcare spending, while helpful, would not address the scale of current inflation problems. He also said the Liberals may not be able to address many of the holes in the housing sector, noting that there is little the government can do when you own a home and have a mortgage.

Milligan, in an analysis for the CD Howe Institute, suggested the government not add too much debt to “maintain debt capacity for future crises” and to prepare for population-related secondary costs. old.

This Canadian Press report was first published on December 2, 2021.

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