Federal Budget: the MEI deplored “broken promises”

Photo Agence QMI, MATTHEW USHERWOOD

QMI agency

Friday, February 23, 2018 12:12

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Friday, February 23, 2018 12:12

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MONTRÉAL – Trudeau government “has not met its commitments” and will now have to be cautious, writes the Montreal economic Institute (MEI) the approach to the federal budget unveiled Tuesday.

The MEI is of the opinion that Ottawa has “systematically betrayed its promises tax since coming to power”. The organization gives the example of the deficit was to be $ 10 billion in 2016-2017, and 2017-2018, and that is, according to the most recent economic statement, by $ 17.8 billion and $ 19.9 billion $, respectively.

“Ottawa has no more leeway and must now create one to be able to react to the economic context”, explained Mathieu Bédard, economist at the MEI, in a press release, noting the “difficult position” in which the minister of Finance, Bill Morneau.

MEI laments that there is no date to return the budget to balance. In addition, while Ottawa initially wanted that the debt ratio on the GDP is reduced to 27 % in 2019-2020, the liberals are now planning a ratio of 29.9 % during this fiscal year.

“Not only no target has been reached so far, but even if the deficits were lower than what had been announced in the fall economic statement, we are going to stay away from all the goals,” added Mr. Bédard. The government expects the costs of the public debt will rise steadily over the next few years.”

In addition, the grand treasurer of the country must in particular respond to a current context, more delicate, because of the risks to the canadian economy, such as the uncertainty related to negotiations surrounding the free trade Agreement north american (NAFTA) or the new tax reform, american style.

“It would be irresponsible to announce new spending, said Michel Kelly-Gagnon, president and ceo of the MEI. Rather, it must tackle the deficit, and the observance of its commitments a priority, without delay, take measures to ensure the competitiveness of our tax system.”