St. Albert MP Michael Cooper is not impressed with the latest federal financial update.
Minister of Finance Bill Morneau announced increased infrastructure spending and provided no projection to a balanced budget, Cooper said.
The federal government presented the fall economic update to the House of Commons on Monday and the focal point was the expansion of infrastructure spending and easing the regulations on foreign investors. The move was created to encourage companies to move to Canada to help boost the economy.
The minister pledged to invest $180 billion over 11 years in “public transit, green infrastructure, social infrastructure, in transportation that supports trade, and in smart cities.”
Along with those areas, the budget update expanded the areas of need to include trade and transportation, and rural and northern communities.
Cooper is not impressed with the government’s increased spending and notes that zero net jobs have been created as a result of the previous infrastructure spending plan.
“What this economic update reflects is the government doubling down on a failed strategy,” Cooper said.
Last March the budget allowed for $120 billion in infrastructure planning over a 10 year timeframe. This fall update expands the funding to $186 billion over 11 years.
For now, the infrastructure spending will start small. The current and next fiscal year will see little of the investment but in the 2018-2019 year the spending will increase substantially.
Cooper says delay is harmful and Alberta can’t wait years for the money.
“The Edmonton Construction Association is warning of further job cuts and bankruptcies,” Cooper said. “The downturn in the construction and energy sectors reinforces the need for an immediate infrastructure stimulus to help create jobs, growth and long-term prosperity. The Liberals have instead chosen to delay critical infrastructure spending and gamble on an untested infrastructure bank.”
The Canada Infrastructure Bank is a new program that was introduced on Wednesday and was suggested by Dominic Barton, who is head of Ottawa’s Advisory Council on Economic Growth.
The initiative, which will kick off as early as 2017, will completely overhaul and change the way infrastructure projects are funded in Canada. The program is assumed to be able to attract more private dollars towards construction projects. The government will bank $15 billion federal funds already dedicated to infrastructure spending and contribute an additional $20 billion from bank holding assets.
The federal government will fund projects, along with municipal and provincial governments and seek private partners in fund development. Projects will receive $1 of federal funding for every $4 to $5 of private capital.
Cooper is sceptical of the infrastructure bank and thinks the government is taking a big risk gambling on an untested program during difficult economic times.
Part of the reason the for the slow growth in the Canadian economy is the performance of oil prices and the sluggish American economy.
One of the strategies to boost the economy is the new Invest in Canada Hub. The government announced a new initiative to entice foreign companies and investors to bring their companies and capital to Canada.
The government will spend $218 million over five years to create a task force that they hope will result in jobs and innovative ideas coming in to Canada and helping to boost the economy.
Along with attracting foreign talent, the government will make it easier for foreign investors to enter the country. New guidelines released at the end of the year will make it easier for foreign companies to navigate security reviews.
Legislation changes were also announced to make the government more open and transparent by making Statistics Canada and the Parliamentary Budget Officer more independent.
The PBO will be made an independent officer of parliament, separate from the Library of Parliament and the mandate will be extended to include the costing of political party platform proposals.
The Chief Statistician of Canada will be granted greater powers over the formation and release of official statistics. Appointments will be placed on a fixed five year renewable term based on merit and the chief statistician can only be removed with just cause.
The deficit for 2016-17 is expected to come in at $25.1 billion dollars. By 2021-22 the debt will be down to $14.6 billion dollars. The debt-to-GDP ratio is expected to return to 31 per cent by 2020-21 and continues to be the lowest of all the G7 countries.
