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Liberals to give economic, fiscal update today

Finance Minister Bill Morneau will deliver the new government's first economic and fiscal update to Canadians on Friday morning.

Finance Minister Bill Morneau will deliver new government's first update

Bill Morneau will deliver the new Liberal government's first fiscal update on Friday morning. (Chris Wattie/Reuters)

Finance Minister Bill Morneau will deliver the new government's first economic and fiscal update to Canadians this morning.

Morneau will deliver the government's fiscal outlook at around 10:45 a.m. on Friday at an event in Ottawa. Prior to that, journalists will be briefed on the contents of the outlook under embargo.

The update "will not include measures to be adopted by this government," the Finance Department said in a release. That means it is likely to be simply a look at the government's finances as they stand, and not contain any new information about future spending plans on things that were promised during the election campaign.

The report comes on the heels of a similar one earlier this month from the Parliamentary Budget Officer that found Canada's economy — and by extension, Ottawa's finances — is performing worse than anticipated, and on track for deficits in the range of between $3.6 billion in 2016-17 and $6.9 billion in 2017-18.

The PBO's previous report, in April, forecast the economy to expand by 2.1 per cent this year. Their update earlier this month ratcheted that down to 1.1 per cent. That's barely above Canada's current inflation rate

After the government's budget finally returned to balance after several years in the red, the Liberals campaigned on a pledge to run small deficits in each of the next few years before returning to surplus down the line in 2019-2020.

If the government sticks to that plan, and if Friday's update is in keeping with the PBO's recent projections, their new deficits could be larger than first thought, the PBO warned.

When the PBO put out its numbers last week, Morneau told reporters he wasn't surprised to see the economic picture had deteriorated, but suggested the government had no plans to drastically change course.

"As you heard during the course of the campaign, we were, and continue to be, concerned with the state of the economy, and that really was the foundation for our platform," Morneau said.

Election promises

The government's release Thursday stressed that the update will not include any details about future spending plans, but the finance minister will be pressed upon by journalists to answer questions about what the updated numbers mean for the Liberals' campaign agenda, including big infrastructure spending and a promise to reduce the tax burden on middle-income earners.

"Our platform talked about significant investments and infrastructure, investments that we believe will help us to enhance growth, investments that we see will have the possibility of creating jobs, and investments that will enable us to improve the lives of Canadians across the country," Morneau said of the PBO report.

Treasury Board President Scott Brison recently suggested the Liberal government may have to make adjustments to fulfil its election promises because the government's fiscal status was in much worse shape than anticipated.

With files from The Canadian Press

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