The fall economic update was released yesterday, and while the rapid pace of economic growth has meant more revenues and a smaller deficit, it also means that the government isn’t going to put too much more effort into getting back to balance anytime soon, keeping the focus on reducing the debt-to-GDP ratio instead (which is going down faster). Instead, finance minister Bill Morneau insisted that they would be “doubling down” on investing in the middle class, mostly by indexing the Canada Child Benefit to inflation earlier than planned, as well as enhancing the Working Income Tax Benefit (and I will note that this part of his speech seemed to be one where Morneau acknowledged that singletons existed and needed a hand up too). There was some additional programme spending in there as well (for more, the National Post outlines eight things in the update).
https://twitter.com/kevinmilligan/status/922918242812698625
https://twitter.com/kevinmilligan/status/922949710129848321
https://twitter.com/LindsayTedds/status/922922615597023232
https://twitter.com/LindsayTedds/status/922923497008984065
While the economy is growing at an enviable pace, it could put the government and the Bank of Canada in a bind as the need to start withdrawing stimulus measures comes to the forefront, and deciding whether fiscal or monetary policy should make the first move. There is also a marked shift between last year’s update and this year’s in that the focus is moving away from longer-term goals to short-term ones (and that could be political reality setting in). Critics accuse the government of using the update to try and change the channel on the recent headlines around Bill Morneau’s assets and disclosures, while Andrew Coyne gives his signature scathing look at the choices of the deficits, and around the rapid growth in government spending.
The govt's fall economic update is full of good news, but Dan Kelly of @CFIB , @Sean_Speers and @LindsayTedds still have some concerns pic.twitter.com/95696cqMxn
— On The Money (@OnTheMoneyCBC) October 24, 2017
Former PBO Kevin Page assesses the gov't's fall fiscal update: It's a good day to be the Finance Minister. #pnpcbc #cdnpoli #cdnecon pic.twitter.com/82rpxwoh1N
— Power & Politics (@PnPCBC) October 24, 2017