Since the release of the federal budget, the biggest question has been whether going into deficit to boost the economy is a good move—especially given Canada’s weak growth prospects.
But Minister of Finance Bill Morneau stands by this tactic. In a speech for the Empire Club and Canadian Club of Toronto, he conceded we’re facing lacklustre growth and challenging demographics trends. Still, he adds, the best way to kick start the economy is to support the middle class as well as “make investments to get more people working in the medium term and enhance growth in the long term.”
Further, “Budget 2016 is just the beginning.” Morneau says investments in the economy are manageable because we have low interest rates and, compared to other G7 countries, a low debt-to-GDP ratio.
Going forward, the government plans to support tech hubs, such as Kitchener-Waterloo, says Morneau. As a result, Canada will benefit from increased innovation, and research and development.
For more from Morneau, check out the live tweets below. And, follow @advisorca for more news and event coverage.
Plus, for more on the budget, read:
Live tweets from post-budget event with Bill Morneau
#Budget2016 was based on two goals: investing in people and families, and in growing the economy over long term, says @Bill_Morneau #cdnpoli (for more on the Canada Child Benefit, read: Who will benefit from the new family tax regime?)
#Budget2016 also stresses #education is important, says @Bill_Morneau (For more, read: Budget’s education measures take from the rich, give to the poor)
Also, check out how #Budget2016 will impact clients’ #retirement years: How budget 2016 will impact your client’s retirement.
Now, we’ll have Q&A: First, why go into deficit at tough times? @Bill_Morneau says we’ve had weak growth and demographics challenging. So, we need to make investments that enhance growth in long term, but get more people working in medium term, adds @Bill_Morneau #cdnpoli
One way to boost Canada is to match federal investments with those of institutional investors, for optimal impact: @Bill_Morneau #economy (Read: When diversification drags returns and How institutional investors use ETFs)