What to expect from Morneau’s fall economic update

The Liberal government is making an announcement about Canada’s economic and fiscal progress this afternoon, with the release of its fall economic update.

Finance Minister Bill Morneau is expected to deliver to the House of Commons after question period today, followed by debate.

Tune into cpac.ca for more updates and live streams (Morneau is expected to speak around 3:20pm ET).

What to expect from Morneau

On Monday, Morneau said during question period that the public would see positive results from the enhanced child benefits and the Liberals’ tax-bracket changes, which lower tax rates for middle earners and raise them for the well-heeled.

He added, “What we’re going to do tomorrow is talk about our long-term plans to make a real difference for middle-class Canadians for the future,” said Morneau. “We’re going to have a plan for the long term to improve the situation for our economy.”

In the House of Commons, interim Conservative leader Rona Ambrose attacked the Liberals’ approach, challenging them to build a plan that will create jobs instead of adding to the public debt in Tuesday’s statement.

“Who does the prime minister think is going to pay for this next spending spree?” Ambrose said.

Morneau’s Tuesday statement is expected to be more substantive than the usual economic and fiscal projections of a typical fall update. Sources have said it will seek to convince the public the Liberal economic plan is working and promote Canada abroad as an alluring investment destination in an uncertain world.

The document is also expected to echo some of the advice Morneau received from his council of external experts, who were hand-picked to help the government boost economic growth.

Read: 3 ways to lift Canada’s growth

Earlier this month, the council released recommendations urging Ottawa to broaden its proposed infrastructure bank to leverage private capital, to increase immigration to 450,000 people from 300,000 over five years, and to create an agency with a goal to expand foreign direct investment in Canada.

The government’s immigration targets for next year, revealed Tuesday, stayed level at 300,000, but established that threshold as a permanent baseline, with plans to increase it in future years. This year’s target was considered a temporary spike to allow for an influx of Syrian refugees.

Sources say Morneau’s update will echo some of the council’s advice, but (like Immigration Minister John McCallum’s targets) he likely won’t adopt the group’s recommendations outright–particularly those that might be considered too ambitious.

The document is also expected to provide some details on the government’s infrastructure program, to which Ottawa has already committed $120 billion of public money over the next decade.

Read: What Morneau said at pre-budget consultation

Background

The Liberals’ platform promised to help lift the slow-growth economy through borrowing to fund more ambitious infrastructure and child-benefit programs.

But a few months into their mandate, the Liberals pointed to weaker-than-expected economic conditions, which led them to triple their anticipated budgetary deficits for the next two years.

In a release yesterday, Scotiabank predicted that Canada’s weakened economic situation would force Ottawa to run a $30-billion shortfall this year and a $32-billion deficit next year. Read more.