What the Fall Economic Statement from the Liberals Does and Does Not Achieve
Finance Minister Chrystia Freeland’s Fall Economic Update
On Nov. 21, Finance Minister Chrystia Freeland released the fall economic update. In normal circumstances, this wouldn’t be a major event, but given the present circumstances, it carries significant weight.
The Liberals are trailing considerably behind Pierre Poilievre’s Conservatives in the polls. According to odds, there’s a strong likelihood that the Tories would secure a majority government with around 200 seats in the House of Commons, if an election were to be held today. The Liberals would lose half their current members.
The budget update was meant to address both cyclical and systemic economic issues. Freeland emphasized the importance of investing in public transit, EV battery factories, and green energy projects from the beginning of her speech. She heralded these projects, comparing them to John A. Macdonald’s transcontinental railway, and also noted that the country has attracted considerable foreign direct investment under her government. However, there was no mention of the significant subsidies provided by Canadian taxpayers for these investments, which may end up being a net negative for the economy.
Other measures touted in the update include affordable early learning programs and cheap child care, aimed at stimulating the economy by enabling mothers to stay in the workforce. However, there are concerns as to whether this type of program is a transfer of wealth from other demographics to mothers. The government also promised 100,000 new homes to address Canada’s housing crisis, but it remains to be seen if this would significantly impact the housing shortage in an economy with rapid population growth.
While there were expectations of budget cuts, Freeland’s speech did not mention them. The federal deficit is expected to increase from $35.3 billion to $46.5 billion in 2023–2024, but it is still relatively low as a percentage of GDP. Inflation has also fallen, providing some relief for the economy. However, the current interest rates and impending mortgage debt refinancing will have a negative effect on economic growth in the coming years.
Additionally, the statement is critiqued for lacking focus on significant economic realities such as housing affordability and a weakening economy. The policies proposed in the statement are seen to be more oriented towards government manipulation of the economy rather than allowing the free market to address the problems created by government intervention.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
