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Poilievre criticizes higher spending in budget update, pledges to accelerate energy projects in speech to business leaders

Speaking to a Toronto business audience the day after the fall economic update in Ottawa, Conservative Leader Pierre Poilievre slammed the Liberals for failing to bring government spending back to pre-pandemic levels .

Mr. Poilievre repeated his claims that federal spending was contributing to the current high levels of inflation and told the Empire Club that a Conservative government would bring in tax reforms encouraging participation in the labor market and speeding up the approval of major energy projects.

Regarding Finance Minister Chrystia Freeland’s economic update, he questioned why the government says program spending will remain well above pre-pandemic levels even after the end of the emergency programs.

“It is true that COVID has been very expensive. The government shut down economies and we had to compensate workers and businesses for the loss of income they suffered. There is no doubt about it, ”he said on Friday. “We didn’t have to increase government spending by 30% between the pre-COVID period and now, when all COVID programs are supposed to have expired. We didn’t need to have a permanent expense growth rate, unrelated to COVID, which left us in this precarious situation.

Thursday’s economic update says program spending will be $437.8 billion this fiscal year and will rise further each year of the five-year projection. The amount for this year is 29.3% higher than 2019-20 levels.

Measured as a percentage of GDP, the projected level for 2022-23 is 16%, compared to 14.6% in 2019-20. Looking ahead, the update indicates that program spending as a percentage of GDP will decline over time, reaching 14.7% in 2027-28.

That of the Minister of Finance economic update included a tax on stock buybacks, significant green energy investment incentives, and spending on students and low-income workers.

He also presented two sets of fiscal forecasts based on whether or not the Canadian economy enters a recession in 2023.

The update’s baseline forecast, which assumes a recession is averted, calls for the federal deficit this year to be $36.4 billion, an improvement from the $52.8 billion deficit forecast. in the government’s April budget. The baseline forecast calls for a surplus of $4.5 billion by 2027-28. However, if a recession occurs, the government’s “downside” scenario shows larger deficits and no return to balance over the next five years.

Prime Minister Justin Trudeau and Ms. Freeland held a press conference elsewhere in Toronto on Friday shortly after Mr. Poilievre’s speech.

Mr Trudeau criticized the Conservatives’ economic policy as a “reckless” plan based on spending cuts, while Ms Freeland said government pandemic spending has proven to be good economic policy.

“Spending was the compassionate thing to do. It was also the smartest thing to do economically, and the numbers show it,” she said. “Once the major COVID emergency was behind us, we moved to a truly responsible fiscal trajectory.”

Freeland said credit rating agency Moody’s confirmed Canada’s triple-A credit rating on Thursday.

“You don’t have to believe us. Trust Moody’s. A rating agency. Their main task is to assess the fiscal sustainability of countries. This is what they are experts in. And that Triple-A rating with a stable outlook, what it’s saying is that Canada is definitely in a financially viable position, which means we can afford to be there to support Canadians no matter what or the global situation. the economy throws us.

Earlier in the day, Conservative, Bloc Québécois and NDP MPs criticized the government’s update during the final question period before a week’s recess in the House of Commons.

“Workers and people on fixed incomes across Canada are grappling with the highest levels of inflation in 40 years. Food bank use has exploded. Let’s be clear: our federal and provincial governments are part of the problem,” NDP MP Niki Ashton said Friday. “We need to tax the rich, close loopholes, close offshore tax havens and support working people.”