Financial markets may have shrugged off Canada’s election results on Tuesday in spite of dire warnings from Conservative Leader Andrew Scheer that a Liberal victory would surely mean out-of-control deficits and irresponsible new taxes.
But Justin Trudeau should not for a moment take the markets’ nonchalance as an endorsement of his plans for economic management. The business community is anything but nonchalant, and the East-West schism that the electoral results are already exacerbating only makes matters more uncertain.
It’s true that some traditional critics of big deficits — which, under the new government, will continue — seem largely unperturbed. Both the Bank of Montreal and Scotiabank saw little economic damage from the Liberals’ fiscal plans.
Scotiabank argues that while the Liberals committed to $31 billion in extra spending over the course of a four-year mandate, and while the co-operation required by a minority situation means that spending will probably rise more than that, investors need not be concerned.
“A parliamentary alliance — formal or otherwise — will likely put upward pressure on the final tab as compromises are negotiated,” Scotiabank economists note. But that’s OK for now because the debt burden will stay low, they add.
For the rest of this article: https://www.thestar.com/politics/political-opinion/2019/10/22/election-has-done-little-to-ease-anxiety-in-canadas-business-community.html