As the world prepares for an impending economic crisis, Canada won’t adopt “slash and burn” economics, according to Finance Minister Chrystia Freeland.
Her comment comes after she tabled her fall economic statement on Thursday, which warned Canada is set to face “significantly weaker growth” and runs the risk of stubborn and prolonged inflation in the months ahead.
The fall economic statement nonetheless included almost $30 billion net in new spending measures over the next six years, despite a terrible economic outlook for the global economy. Freeland defended this strategy in an interview with Mercedes Stephenson of The West Block, which aired on Sunday.
“We witnessed a couple of weeks ago what happens when a hard-right administration decides that slashing and burning is the only way to deal with a difficult global economy,” Freeland said.
“That’s what we witnessed with (former British Prime Minister) Liz Truss. And the result wasn’t appealing.
According to sources, the Bank of England issued a warning this week that the United Kingdom is on track to experience its “longest recession since records began.” As soon as the world realised Truss’ proposal was being derided as trickle-down economics, Freeland declared that the British pound had been “plummeting.”
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According to Freeland, the Bank of England had to intervene to safeguard the British economy as it “saw British pension funds on the verge of imploding.”
In Canada, we won’t take that action.
Times of economic uncertainty, Freeland added, are “when we need our social safety net the most, when Canadians need the security of EI and the CPP. ”
She continued, “And we’re going to protect that.
While everything was going on, Conservative Leader Pierre Poilievre denounced the economic statement as a “inflationary scheme” in the House of Commons on Thursday.
The Opposition leader criticized the Liberals for not matching their $30. 6 billion in new spending over six years outlined in the update with equal budgetary cuts, which he said will continue to drive up inflation and hurt average families.
Poilievre, however, had previously criticised the current administration’s intentions for the economy, particularly its desire to raise CPP and EI premiums, even before the fall economic statement was presented. He has called for the government to reverse course and referred to the increases as “taxes.”
Prime Minister Justin Trudeau retaliated in a speech on Friday. He charged that Poilievre’s Conservatives were promoting “failed” strategies.
“They’re actually doubling down on the failed, old theory of trickle-down economics, which means tax breaks for the wealthy while hollowing out the middle class,” he said.
Even as the chorus of voices expecting a downturn intensifies, the federal government did not explicitly indicate in its estimates whether it expects Canada will enter a recession.
According to analysts surveyed back in September, growth would be “much less” than what Ottawa’s budget from this past spring promised. According to the new baseline prediction, global GDP growth would be “slightly around zero for the next several quarters” and unemployment will reach 6. By the end of 2023, it will be 3%.
The likelihood of a recession in Canada is similarly estimated at 40% in that scenario.
But Ottawa’s update also provides a “downside scenario” outlining a worse case amid economic uncertainty.
— using materials from Craig Lord and Amanda Connolly of Global News.
‘Slash and burn’ economics are not the solution to the world’s problems, says Freeland
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