While the bad news fall on the Canadian economy, the Conservatives travel the country to announce infrastructure and to highlight their new service projects for young children. But these many expenses will be beneficial for the economy, insists Finance Minister Joe Oliver.
The pre-election period for the next election of October came as the country’s economic picture appears darker. Some experts talk of a possible recession, the growth forecasts are revised downwards and oil prices are still low. Very bad news for a Conservative government that boasted its sound management of the economy.
In the past, the Conservatives were trying to get re-elected by announcing investments popular with the electorate, but while promising a return to balanced budgets. This time, with a weaker economy, they had to change strategy and promote state intervention.
“What people should understand is that some of the measures announced by the Prime Minister and I announced in the budget will inject almost $ 10 billion into the economy this year,” said Minister Joe Oliver, last Tuesday in Vancouver.
“The two main sources of these cash receipts come from programs for families and infrastructure spending. So it will have an impact, a positive impact on the Canadian economy, “he continued.
On 20 July, parents of children under 18 years old will benefit from new services – which are retroactive from January – a move that will cost more than $ 2.5 billion to the government.
At the same time, Ministers and Conservative MPs walk to Canada almost daily announcing new infrastructure projects in their communities. According to the office of Minister Oliver, the government has added over $ 1.6 billion infrastructure fund in 2015 and 2016.
Economists are divided on the real effects of these policies on the Canadian economy this year. But they agree on one point: a balanced budget, the Conservatives probably did not announce new measures to avoid a recession before the elections of October.
“They are a little trapped, because they make the return to a balanced budget one of the important points of their platform,” noted Don Drummond, former official at the Finance Ministry and now a professor at Queen’s University .
Mike Moffat, professor at the business school of the University of Western Ontario and chief economist at the Mowat Centre think tank, says that the growth predictions downward TD Bank suggests a loss for the government 3 billion $. The Bank forecasts growth of 1.2 percent, while the Minister Oliver had instead made his calculations with 2 percent.
Mr. Moffat, which has also helped the Liberal Party in developing its own family policy, however, believes that the checks given to the parents will have positive effects.
“I do not think the government knew we would be in recession in July (…) It is a happy coincidence and I think it will be beneficial,” he argued.
Finn Poschman, vice president of the CD Howe think tank, believes that this policy will have no negative effects, nor “strongly positive” effects.
“The possibility that (the measure) is harmless is much stronger than the opposite,” analyzed one who describes himself as a “market-centered” economist.
According to Don Drummond, however, it is more the infrastructure fund that will have positive impacts on the economy and less subsidies given directly to families.