Prime Minister Justin Trudeau defended his government’s economic performance Thursday, touting investments in housing and dental care, when asked about new data showing the economy actually contracted last quarter.
Statistics Canada announced this morning that the Canadian economy is Shrinking at an annual rate of 1.1% Third-quarter results were much worse than some forecasters had expected from July through September.
In October, the Bank of Canada predicted that the economy would actually: grow by about 0.8% In that quarter.
Finance Minister Chrystia Freeland’s autumn economic statement released last week cited a September survey of private economists that expected the economy to grow at least slightly in the third quarter. A weak economy could undermine the document’s fiscal outlook.
New data from StatsCan suggests the economy is falling short of even the relatively pessimistic growth forecasts by central banks and others.
According to Statscan, one reason for the recession was a decline in exports, including a sharp decline in refined petroleum and energy products.
US GDP Increased by 5.2% At the same time.
Conservative Leader Pierre Poièvre slammed Prime Minister Trudeau for “leading the economy into a ditch” over the poor statistics.
The negative economic growth came after the Bank of Canada launched an aggressive interest rate hike campaign to curb rampant inflation.
featured videosPrime Minister Justin Trudeau says his government is investing in housing and affordable housing after Statistics Canada said gross domestic product (GDP) contracted by 0.3 per cent in the third quarter.
The intended effect of this effort – slowing the economy to restore price stability – appears to be working.
“We know that Canadians are facing difficult times, and that they will be for a long time,” Trudeau said.
“That’s why we have stepped up direct support to Canadians,” he said, citing past GST rebates and rent relief for low-income Canadians.
Trudeau said Ottawa will move forward with the Housing Accelerator Fund, a program that funnels money to cities that cut through building red tape to build more housing.
He said the government would provide more low-cost loans to home builders to help them build affordable rental housing to address the country’s severe housing shortage.
He also said federal dental care programs for children and the upcoming expansion of dental care programs for eligible seniors could save families money when every extra dollar counts.
Prime Minister Trudeau says Ottawa is managing its finances in a “fiscally responsible manner” and the federal government could provide further relief for Canadians if the economy goes into recession and unemployment rises. he claimed.
“If there are other things that need to be done, we have room to respond,” Trudeau said.
“Our budget deficit is the lowest in the G7, and our debt-to-GDP ratio is the best in the G7.”
He accused Mr. Poièvre of planning to rapidly eliminate the federal deficit through harmful cuts to public services. “Conservatives are proposing cuts to services and programs as a way to create growth, but this just makes no sense,” Trudeau said.
Poièvre warns of ‘stagflation’ risk
Although Canada’s debt servicing costs are lower than those faced by some other countries, Freeland’s fall economic statement warns that debt servicing costs are expected to rise.
With interest rates at 20-year highs, the cost of borrowing to service the federal government’s $1.2 trillion debt has jumped from $20.3 billion in 2020-21 to $46.5 billion this year.
Poièvre said Canada could face “stagflation,” or high inflation with high unemployment and weak demand for goods and services.
featured videosConservative Leader Pierre Poièvre said the U.S. economy is “doing well,” but Canada’s economy is “snoring.” Finance Committee President Anita Anand touted the Liberal Party’s economic plan, dismissing what she called “banal rhymes.”
Inflation has been flat in recent months, and the country’s unemployment rate remains relatively low at 5.7%.
And while the third-quarter GDP numbers were a big miss, Statistics Canada revised the second-quarter numbers upwards.
Federal agency statisticians now say economic growth for the April-June period was 1.4%, higher than previously reported.
But Poièvre said Canada’s record doesn’t compare to what happened in the United States.
“Why is the American economy roaring while the prime minister’s economy is snoring?” Poièvre said during a question-and-answer session.
Treasury Board President Anita Anand said the International Monetary Fund (IMF) predicts Canada will have the highest economic growth of the G7 next year.
Rachel Bendayan, Parliamentary Secretary to the Minister of Finance, said the Conservatives were “downplaying” the economy, while the Liberals were focused on economic plans such as increasing housing supply and promoting climate-friendly industries. Stated.
Industry Minister François-Philippe Champagne also responded to Conservative criticism by touting the recent multibillion-dollar investment by U.S. chemical company Dow in Fort Saskatchewan, Alta.
“There’s one number the Conservatives never mention: we’re third in foreign direct investment,” Champagne said. “This is how to lead the country. This is how to lead the economy.”
