Cabinet Trudeau experts say that the economy will slow down sharply

We can expect a significant slowdown in the economy. We can expect unemployment rates to rise both in Canada and in other jurisdictions such as the US, Europe and the UK.Former Deputy Governor and Senior Research Fellow of the Bank of Canada Griswold Center for Economic Policy Research Princeton University, Carolyn A. Wilkins.

There is serious risks, University of British Columbia economics professor Kevin Milligan was also invited to the Cabinet table for the second of three days in Hamilton, Ont. He insisted that the economic situation will affect interest rates, inflation and government revenues.

According to him, there is an economic slowdown very likelypolicy makers should remember to ensure that there is an employment insurance system ready and Consider the next round of income transfers targeted to low-income people.

“More severe recession likely”

A joint report Monday by the Business Council of Canada and the firm Bennett Jones found that the budget projections presented in the latest federal budget and the fall economic report were too optimistic.

The report, written by former Bank of Canada governor David Dodge and former Liberal fiscal policy adviser Robert Asselin, concluded that the government’s projections were biased toward a certain group. persuasive but optimistic economic and interest rate assumptions, but are unlikely to materialize.

The authors warn that there is a deeper recession is likely This year, and the Liberal promises across the board, will cost more than expected – whether it’s funding health care, national defence, infrastructure improvements or climate change.

To meet the Bank of Canada’s 2% inflation target and prevent price increases from stabilizing at 3% or 4%, Ms. Wilkins believes that we will need to increase unemployment.

Currently, the unemployment rate is around 5%. But before the pandemic %”,”text”:”les gens pensaient que le taux naturel où il y a du chômage [et] où il ne crée pas d’inflation est de l’ordre de 6%”}}”>People thought that where there was unemployment, there was a natural rate [et] where it does not cause inflation, it is around 6%noted.

As for spending, the government should consider that $5-7 billion in spending could equate to around 25 basis points of interest.

But not all costs are created equal, he said. Moreover, according to Professor Milligan, a possible agreement with the provinces on long-term health care funding should not have a big impact in the short term.

Fiscal responsibility

It will be celebrated as a year many uncertaintiesespecially given the reopening of the Chinese economy, said Finance Minister Chrystia Freeland more important than ever for the government to be responsible approach on the tax side.

Ms. Freeland said she disagreed with the Canadian Business Council’s study, laying the cards on the table in her fall economic statement, where she presented a scenario. alternative prevented a less robust economy.

As for the script mainit was neither the work of civil servants nor politicians, but rather based on average forecasts from private sector economists, argued Ms Freeland.

It is objective. So we took that as a baseline scenario, because Canada has been doing it for 30 years, and it’s an experience that I think is important for independence, for the objectivity of our projections.he insisted.

Minister Randy Boissonnault believes Canada’s fiscal reality will fall somewhere between the best-case and worst-case scenarios presented in last fall’s economic statement.

Photo: The Canadian Press/Nick Iwanyshyn

A year turbulent

That’s the economy priority The Trudeau government’s Liberal lieutenant governor for Quebec backed Pablo Rodriguez during a brief rebuke.

” Every day we talk to each other about the economy, whether it is at the level of deputies, colleagues, or at the cabinet level, because we are human until we become a member of parliament or a minister: “we put gas in front of us” they go to buy grain. We know what happened and we are working on it. »

It will be next year turbulent for the economy, according to the federal finance minister, but Randy Boissonnault insists the government still has room to maneuver on top priorities, including a new health deal with the provinces.

On Tuesday morning, Mr. Boissonnault acknowledged that there was a lot of uncertainty. So we’ll be following you every step of the way as we prepare for the budget. [de 2023]. We still have the financial space to do what we need to do, but the fiscal space has shrunk.

Mr. Boissonnault singled out the Ukraine war, interest rates and inflation among the issues that are both uncertain and hurting the economy.

The federal finance minister said his government will take the Canada Business Council report and many others into account when making its economic forecast ahead of the next budget.

He believes the budget reality will be between the best-case and worst-case scenarios presented in last fall’s economic statement.

Hamilton’s Choice City

The Liberals are trailing the Conservatives in the latest polls, and Hamilton’s retirement is electorally strategic. The city is in one of the most hotly contested regions of the country, and the Liberals will have to do well there if they want to stay in power.

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Protesters eagerly awaited Justin Trudeau’s cabinet in Hamilton on Monday.

Photo: The Canadian Press/Nick Iwanyshyn

The Liberal cabinet received a strong reminder on Monday of its strong opposition freedom caravan.

Trudeau was met with a small protest after arriving in Hamilton on Monday afternoon. A larger group of about forty people returned in the evening. Protesters waved flags, shouted and set off fireworks – some apparently aimed at the building.

Most of the protesters dispersed around 11 p.m., but at least one spent most of the night recalling the tractor-trailer honks that shut down downtown Ottawa for three weeks nearly a year ago.