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Recession risk? What is being said at Trudeau retreat

by News Desk
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Prime Minister Justin Trudeau will meet with ministers for a retreat before returning to Parliament to plan his priorities for 2023. A big focus of the conversation is concerns about Canadians’ cost of living.

Moreover, the question circulating in the Cabinet is that, given the risks of a recession, liberals should seek domestic political and international commitments, as well as potential multi-billion dollar deals with states on health care. How do you plan to pay for

When Trudeau meets the bench in front of him, new report The Canadian Business Council’s Bennett Jones has warned that there is a “high risk” that liberals will not be able to implement all spending plans unless they deviate from a more prudent fiscal line.

Assisting the Cabinet in assessing the state of the economy on Tuesday, ministers spoke with three economists ahead of expected further rate hikes by the Bank of Canada on Wednesday.

So what does the Federal Cabinet Retreat have to say about all this?

Here are some important quotes.

Deputy Prime Minister and Minister of Finance Chrystia Freeland

“As a government, we have a lot to say about the people of Canada, the people of Canada, and what Canadian businesses are doing to build Canada’s economic capacity to drive growth and create better jobs for Canadians. We talked about the challenges ahead, which are very important.There is a lot of uncertainty and volatility in the global economy.We also talked about Canada’s position of strength entering this difficult time. I withdrew on Tuesday.

“We must continue to take a prudent approach financially. We do not yet know how the planes will land.We do not know how the COVID recession will ultimately play out…so how many You have to do all these challenging things at the same time, and that’s the balance you have to find within your budget,” she said.

Randy Boissonneau Assistant Secretary of the Treasury

“We are already seeing an economic slowdown, which means we have to make very serious choices about how we invest in Canadians, how we grow our economy. where to actually direct the available fiscal space, the money that must be invested in the budget [2023] So we are choosing wisely for the future… Inflation is still around 6.3%, three times higher than we would like, so the economic slowdown continues. So 2023 is going to be a turbulent economic year,” Boissonneau said in an interview with Vassy Kapelos on CTV News Channel’s Power Play, broadcast live from the retreat on Tuesday.

“This means that we as Canadians face difficult times. That is why our support for Canadians continues. economic fundamentals are good…the future looks very bright for Canada beyond 2023. We can explain the international reasons for that, but the bottom line is that this budget will help Canadians It means that you have to make a very clear choice.

Carolyn Wilkins Former Governor of the Bank of Canada

“The question on people’s minds is, ‘Where will interest rates plateau? There are risks to the outlook to the downside. Clearly we have not seen all the impact of interest rates, as it will take time for interest rates to act. It’s actually going to be the first three, Wilkins said in a scrum with reporters at the retreat on Tuesday, where we’ll see the impact on GDP growth and jobs in the quarter this year.

“And that will further reduce inflation. Meanwhile, China has opened up its markets and the labor market here in Canada, the United States and other countries is still somewhat tight. So it could mean inflation continues. sticky at levels a little higher or lower than they are now, but still higher than the 2% inflation target many of us have, so interest rates will either rise further or stay for longer I need you,” she said.

Kevin Milligan Professor of Economics, University of British Columbia

“Now that we are looking at the new commitments that are being made, we will have to wait and see what will be revealed with the health pact. It’s going to be a long-term deal so that short-term considerations won’t be affected too much.It’s a situation where the Bank of Canada is still watching what happens to fiscal policy. Too far, too fast and the Bank of Canada will simply accelerate things and make the interest rate environment more difficult,” Milligan said at a scrum with reporters at the retreat on Tuesday.

“I think there will most likely be a soft patch in the economy over the next year, and I think all policy makers should keep that in mind. To make sure that another round of income transfers to lower income groups in a targeted way is the kind of policy action that can be considered when the economy slows,” he said.

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