The House

Midweek podcast: the politics of Bill Morneau's fall fiscal update

On The House midweek podcast, the CBC's Rob Russo, David Cochrane and Karina Roman join Chris Hall to put finance minister Bill Morneau's fall fiscal update under the microscope.
Finance Minister Bill Morneau receives applause from Prime Minister Justin Trudeau and others after delivering his fall economic statement in the House of Commons in Ottawa, Tuesday, Oct. 24, 2017. (Adrian Wyld/Canadian Press)

After spending the past week on the defensive, finance minister Bill Morneau got to deliver some good news on Monday.

Thanks to a roaring economy, the Liberals used the fall fiscal update to announce increases to the Canada Child Benefit and a more generous tax credit for low-income earners.

In his spring budget, Morneau expected to post a deficit of $28.5 billion for the current fiscal year. Thanks to rising revenues from an economy that leads the G7, that shortfall is now expected to be $19.9 billion. 

The finance minister's fall economic statement pegs GDP growth at 3.1 per cent this year and 2.1 per cent next, with unemployment at rates not seen in more than a decade. 

Rather than earmark those newfound dollars to further reducing the deficit, the government is pressing ahead with nearly $8 billion in new spending over the next five years. 

"With a little more wind in our sails, we're doubling down on a plan with proven results and reinvesting in the middle class," Morneau said Tuesday. 

Highlights from the fall economic update include:

  • Canada's economy (real GDP) is expected to grow by 3.1% in 2017 and by 2.1% next year.
  • Projected deficit of $19.9B for 2017-18, down from previous estimate of $28.5B.
  • Canada child benefit will see annual cost of living increases starting July 1, 2018, 2 years early.
  • Benefit for a middle-class family with 2 kids will go up by about $200 next year, by $500 in 2019.
  • $500M more a year to enhance Working Income Tax Benefit for 1.5 million low-income workers, starting in 2019.
  • Small business tax rate falls to 10 per cent Jan. 1, and to 9 per cent in 2019.
  • Federal debt projected to grow by $100B over next 7 years.
  • Debt-to-GDP ratio still projected to fall faster than predicted in the spring budget, to about 30% by the next election.

The CBC's Rob Russo, David Cochrane and Karina Roman join Chris Hall to put Bill Morneau's update under the microscope.