Justin Trudeau’s cabinet’s agenda over the next three days is to take a hard look at the fiscal and economic picture facing Canada.
HAMILTON—The federal Liberal government’s budget plan to grow the economy and get the public books in order is “unlikely” to work, given its evolving ambitious political promises, higher global interest rates, and the “high likelihood of a more severe recession in 2023,” says a new report.
The report, written by former Bank of Canada governor and deputy finance minister David Dodge, and Robert Asselin, former finance policy adviser to the Liberal government now with the Business Council of Canada, comes as the Trudeau cabinet meets to strategize about the coming months in Parliament.
At the top of cabinet’s agenda over the next three days is to take a hard look at the fiscal and economic picture facing Canada, at looming big-ticket changes to annual health spending, and at tough upcoming public sector contract talks with unions threatening strikes if Ottawa doesn’t meet demands for double-digit pay raises.
The economic outlook Dodge and Asselin produced for Bennett Jones and the Business Council of Canada looks at several scenarios, but mainly it paints a pessimistic picture of the road ahead, and the sustainability of public finances in the face of Canada’s debt, lagging productivity and government revenues, and the Trudeau government’s desire to boost health-care spending, tackle climate change and spur a transition to a stronger digital economy.
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