Liberals to assess stimulus impact in November

Finance Minister Bill Morneau is expected to present an update in November on the progress of the Liberal government’s stimulus program and impact that fiscal spending will have on the struggling Canadian economy in the months to come.

Given that growth has been weaker than projected in the March 22 federal budget for 2015-16, Morneau told reporters on Monday that Ottawa will look at what more needs to be done.

“We’ll see the impacts from the infrastructure investments that we’ve made, and we’ll look at the economic situation in order to figure out what we should be doing — not only in November but our upcoming budget,” he said. November is traditionally the month economic updates are released, a Finance official said.

Morneau’s comments came Monday as he launched cross-country, pre-budget consultations with Canadians leading up to the 2016-17 federal spending document.

Ottawa’s full fiscal budgets are released between February and April. “We will look at the economic situation in order to figure out what we should be doing, not only in November, but in our upcoming budget,” the minister said.

While Morneau declined to provide a timetable for the next budget, the process will include a meeting of the country’s top economists on Oct. 13 in Toronto, followed by a fiscal and economic update. The exact date of that update has yet to be announced.

“As in the past, our intent in meeting with economists ... is intended to get a sense of what they’re seeing across the Canadian economy. Clearly, we are doing our own research as well,” Morneau said.

“We’ll take a look at the projections of those (private-sector) economists as part of the frame for what we talk about later in the fall.”

According to the March budget, the 2015-16 deficit forecast was $29.4 billion. For next year, the government estimated a slightly lower shortfall of $29 billion, but declining at a faster pace until 2020-21.

Much of the spending was earmarked for infrastructure projects and other stimulus efforts — such as increased child benefits — over the next few years.

In the March budget, Morneau forecast annual economic growth of 1.2 per cent in 2015 and 1.4 per cent this year. In July, the Bank of Canada estimated GDP would come in at 1.3 per cent in 2016.

“I’d be careful not to overplay that,” said Douglas Porter, chief economist at BMO Capital Markets, who is one of about a dozen economists who will attend the budget update session in Toronto.

“I don’t think there’s been a big shock in the economy this year.”