Federal budget is the economic impact of “exaggerated” stimulus spending, budget officials say

Ottawa-Parliamentary spending observers say the Commonwealth Liberal Party’s budget overestimates how the stimulus will affect Canada’s economy.

Last month’s budget outlined what the government said was $ 101.4 billion, a three-year new spending aimed at helping the country get out of the economic hole caused by the COVID-19 pandemic. ..

However, Wednesday’s budget official’s report estimated that only $ 69 billion of that spending could be considered a stimulus.

Eve Giroud said spending would boost economic growth by 1% next year and create 74,000 jobs, compared to budget estimates of 2% and 334,000 jobs.

He added that deficits and increased debt over the next few years could limit the government’s ability to introduce new permanent programs without spending cuts or tax increases.

Gillou’s report landed hours before Finance Minister Chrystia Freeland scheduled to begin discussions at the House of Commons on the government’s budget, which was announced last Friday.

A minority Liberal government will collapse without the support of at least one other major party, leading to a process that can pass budget proposals and trigger campaigns.

The Liberal Party spends on recovering the labor market, which witnessed a historic decline a year ago when 3 million jobs were lost in March and April 2020 and 2.5 million people plunged working hours. I nailed the plan.

Total employment in March was 296,000, 1.5% below pre-COVID levels in February 2020, and the unemployment rate reached 7.5%, the lowest in the pandemic era.

Statistics Canada will update its employment statistics on Friday and release its April employment report. Experts expect it to show a decline as new restrictions and blockades are imposed in response to the third wave of the pandemic.

Giroux said the Office of Management will return to pre-pandemic levels by next year, when the first tranche of incentives will move from the Federal Treasury, even if jobs decline in April. He said he was expecting it. ..

“And that reinforces the point I’ve repeatedly said over the past few months that $ 70 to $ 100 billion has been misadjusted to jump-start the economy,” Giroux said in a morning briefing with a reporter. I said in the meantime. If the goal is to bring labor market indicators back to pre-pandemic levels, too much over a long period of time. “

Giroud also said the government’s ability to manage the next economic crisis could be diminished by the Liberal Party’s decision to eat up the expanded fiscal room with new spending items.

Jordan press