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Canada government plans further spending to buoy economy
[OTTAWA] Canadian Prime Minister Justin Trudeau's Liberal government doubled down Tuesday on efforts to force an end to years of stagnant growth through spending, by announcing C$81 billion (S$85 billion) in new infrastructure outlays.
In a fiscal update, Finance Minister Bill Morneau said the monies for public transit, green infrastructure, affordable housing, hockey arenas and ports would be dolled out over 11 years starting in fiscal year 2017-2018.
"Slow growth here at home and around the world means our plan is more important than ever," he told the Commons.
The government had announced massive spending in its first budget in March, including C$12 billion for new infrastructure, plunging the nation's finances back into the red to boost growth.
The additional infrastructure funding, said Mr Morneau, "is unprecedented in Canada's history. And it comes at a time when the need is great".
Critics, however, pointed to Canada's growing national debt under the Liberals, which is forecast to grow by a fifth over the next four years.
"By choosing to expand their binge rather than scaling back, they have demonstrated a total inability to make difficult choices with finite resources, and instead opted to borrow from tomorrow to spend today," said Aaron Wudrick, president of the Canadian Taxpayers' Federation.
In the March budget, this year's deficit was forecast at C$29.4 billion. In the fiscal update, it was expected to be lower, at C$24.7 billion.
Economic growth has been weaker than hoped for several years, slowing to 1.4 per cent for 2016.
Over the next five years, it is now expected to average 1.8 per cent, four percentage points above the G7 median, according to the report.