Chrystia Freeland is so adamant on keeping her promise to spend more money, that she’s now gaslighting Canadians into believing the economy is not barreling towards a recession— and that it certainly isn’t in one already.
Despite decades-high stubborn inflation, a continued increase in interest rates, and increasingly-grim projections of a substantial GDP growth slowdown, Freeland goes to sleep every night assured Canada’s economy is in better shape than ever. In fact, during a Liberal ministers’ meeting on Tuesday, Freeland— faced with a growing barrage of concern over whether the federal government’s ambitious spending agenda can persevere through the oncoming economic downturn— insisted that the show must go on, and all campaign promises of boosting health care and transitioning to a green economy will be delivered no matter what.
“This is a once-in-a-generation moment,” said Freeland. “Either Canada’s seizes that opportunity, seizes our share of the new industrial global economy which is being built or we get left behind.” Meanwhile, a recent report by former Bank of Canada Governor David Dodge and Business Council of Canada vice president Robert Asselin suggests the Liberal’s essentially-bottomless budget plan is “unlikely” to transpire, due to rising global interest rates, ever-changing credulous political promises, and a “high likelihood of a more severe recession in 2023.” The pair also projected the federal government’s policy plans could cost Canadian taxpayers an additional $60 billion.
Although Freeland sheepishly acknowledged that the Liberals’ spending promises “are significant fiscal pressures,” she disagreed with Dodge’s and Asselin’s findings, and instead assured anyone who is still listening that Canada’s economy is in a “position of strength” leading into the upcoming uncertain macroeconomic environment. She stopped herself short of saying the economy is heading into a recessionary period, but did concede there is “a lot of volatility in the global economy,” thanks to the war in Ukraine and the subsequent impact on global inflation.
However, according to her, all of that has been accounted for in the federal government’s long-run borrowing and spending intentions, which were unveiled last spring and during the fall economic update. She cited a robust labour force, resilient economic growth relative to G7 counterparts in 2022, and an ultra-low deficit and debt-to-GDP ratio. To further drive her point home, Freeland justified her confidence isn’t stemming from a strictly political standpoint, but rather based on forecasts derived by independent economists from the private sector on behalf of the government.
“We do not know for sure how the COVID recession is going to finally play out, and we do have the reopening of China as a new international — I won’t call it a wild card but a source of real uncertainty. Could be upside, could be downside, maybe a little bit of both,” Freeland explained. (Absent was Bank of Canada Governor Tiff Macklem’s economic projections, but given his history of grossly inaccurate macroeconomic forecasts, we don’t blame her for opting to go with a second opinion).
Information for this briefing was found via Yahoo News, the Toronto Star, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.