Canada's new government pledges fiscal plan suited to tough times

Fri Dec 4, 2015 5:45pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Randall Palmer and David Ljunggren

OTTAWA (Reuters) - Canada's Liberal government, unveiling its plans at the start of the new Parliament, promised on Friday to pursue a fiscal plan "that is responsible, transparent and suited to challenging economic times."

The formal announcement, delivered just hours after fresh data showed the economy was struggling, made no mention of whether the Liberals would stick to their campaign pledge to limit budget deficits to C$10 billion ($7.5 billion) a year.

Liberal leader Justin Trudeau won a parliamentary majority in the Oct. 19 election promising to return Canada back into deficit in order to support an economy suffering from low prices for oil and other commodities.

After contracting in the first half of the year, the economy grew again in the third quarter. But the final quarter of the year has gotten off to a weak start, evidenced by disappointing export and jobs data released on Friday.

Finance Minister Bill Morneau has sidestepped questions as to whether he would keep his deficits to C$10 billion, and declined to answer reporters' questions on Friday after a cabinet meeting.

CIBC Capital Markets Chief Economist Avery Shenfeld said in a note on Friday that the Liberals should let their initial deficit rise to C$17 billion to give the economy an extra lift.

Trudeau's government laid out its plans in an event known as the Speech from the Throne, which largely repeated the government's campaign promises.

The Liberals did use the speech to pledge that indigenous peoples would be more fully engaged in reviewing and monitoring major natural resource development projects. The fate of some oil pipeline projects are in question, and Trudeau had said they require social license or popular approval.   Continued...

Canada's Governor General David Johnston (R) and Prime Minister Justin Trudeau look on prior to the delivery of the Speech from the Throne in the Senate chamber on Parliament Hill in Ottawa, Canada December 4, 2015. REUTERS/Chris Wattie