Morneau: In­fra­struc­ture spend­ing on tar­get

The Daily Press (Timmins) - - BUSINESS - DREW HASSELBACK

TORONTO — Fed­eral Fi­nance Min­is­ter Bill Morneau said Fri­day he’s com­fort­able with the amount of in­fra­struc­ture money the Lib­eral gov­ern­ment has man­aged to get into the econ­omy, de­spite a re­port from the Par­lia­men­tary Bud­get Of­fi­cer that ques­tions the speed of the fed­eral gov­ern­ment’s spend­ing pro­gram.

“We have a sig­nif­i­cant num­ber of projects al­ready un­der­way. The num­bers are ac­tu­ally, from our per­spec­tive, in the range that we ex­pected,” Morneau told re­porters af­ter emerg­ing from a meet­ing with pri­vate sec­tor econ­o­mists in Toronto.

The PBO re­port, re­leased Tues­day, shows that gov­ern­ment in­fra­struc­ture money isn’t be­ing spent as fast as orig­i­nally promised. The re­port con­cludes that in­fra­struc­ture spend­ing that was in­tended to foster growth dur­ing the 2016-17 fis­cal year end­ing this March may not gen­er­ate eco­nomic ac­tiv­ity un­til sub­se­quent years.

In last year’s bud­get, the fed­eral gov­ern­ment es­ti­mated that in­fra­struc­ture spend­ing and other mea­sures would add 0.5 per­cent­age points to Canada’s gross do­mes­tic prod­uct, and a full per­cent­age point in the fol­low­ing year.

“We do ex­pect to see a pos­i­tive eco­nomic im­pact from those in­fra­struc­ture in­vest­ments in 2017,” Morneau said.

The fi­nance min­is­ter was in Toronto as part of a round of pre­bud­get con­sul­ta­tions. He met with 12 econ­o­mists — nine from banks, two from busi­ness groups and one aca­demic — to col­lect their views and hear their fore­casts for the Cana­dian and global economies.

Emerg­ing from the closed-door ses­sion, the min­is­ter was asked what the econ­o­mists had to say about the fed­eral gov­ern­ment’s in­fra­struc­ture spend­ing plans.

“When you get a group of econ­o­mists in a room you al­ways have more than one point of view,” Morneau said. “But I would tell you that, broadly, I was pleased with the sense that I heard, which is that mak­ing in­vest­ments is the right thing to do for the long-term health of the econ­omy, and that we have the fis­cal ca­pac­ity to do so.”

Morneau was also asked about changes the gov­ern­ment last year made to the rules on res­i­den­tial mort­gages. The new lend­ing rules are sup­posed to pre­vent Cana­dian home­buy­ers from fi­nanc­ing their home pur­chases with loans they can’t re­ally af­ford.

Morneau said the gov­ern­ment is watch­ing mort­gage and hous­ing mar­kets to see whether the new poli­cies are pro­tect­ing con­sumers. “We con­tinue to mon­i­tor the hous­ing mar­ket and to make sure the risks are ap­pro­pri­ate to the mar­ket. We don’t have any mea­sures un­der con­sid­er­a­tion at this stage.”

A re­cent spike in bond yields has led some banks to raise their res­i­den­tial mort­gage rates. Morneau was asked whether the gov­ern­ment was con­cerned about the im­pact this could have on con­sumer debt.

“We are ob­vi­ously not in con­trol of banks’ in­di­vid­ual de­ci­sions around mort­gage rates. We ex­pect them to put rates at the place that makes the most sense based on the eco­nomic sit­u­a­tion that they find them­selves in,” he said. “Our goal will be to work to en­sure that Cana­di­ans make the in­vest­ments that make most sense for their fam­i­lies and pro­tect them from risk.”


By­standers watch as Fed­eral Fi­nance Min­is­ter Bill Morneau briefs jour­nal­ists fol­low­ing a meet­ing with lead­ing pri­vate sec­tor econ­o­mists in Toronto, on Fri­day.

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