QUESTION PERIOD — Finance
Budget 2021
June 3, 2021
Senator Gold, according to the C.D. Howe Institute, the government’s long-term projection scenarios in Budget 2021 are optimistic. The representative noted in his appearance at the National Finance Committee, during our study of Bill C-30:
. . . slight changes in economic growth and interest rate assumptions can dramatically change the course of the debt burden to the worst scenario.
The institute’s modelling suggests that the federal debt burden could return to the crisis levels of the 1990s under alternative assumptions around growth and interest rates.
Senator Gold, is your government willing to revisit your budget projections to ensure that we are on a fiscally sustainable course?
Thank you for your question, senator. It’s very important that our plans for helping Canada move forward through the pandemic to a stronger economic situation needs to be and are, in fact, constantly monitored by this government. As they are being monitored, whether by think tanks or rating agencies, it’s the position of this government that the measures, the spending and the investments that have been undertaken were not only necessary but required and appropriate to keep our economy moving forward.
In this regard, senator, it is noteworthy that following the federal budget, the global credit rating agency S&P reaffirmed Canada’s AAA rating.
The government, of course, is constantly monitoring the economic situation and is confident that we’re moving forward in the right direction.
Senator Gold, the Minister of Finance recently suggested multiple times at the Senate Finance Committee meeting that:
. . . the key assumptions upon which the fiscal track in this budget is based are not my projections. Those key assumptions are drawn from a survey of private sector economists.
The fact remains that Canadians look to the minister and the government to make decisions around spending and borrowing, regardless of who is making the projections. These decisions could have financial consequences for years to come.
Senator Gold, could you provide this chamber with updated scenarios that acknowledge the possibility of lower economic growth and higher interest rates?
Senator, thank you for your question. We expect government — whether our government or any other government — to make its decisions based upon the most accurate and comprehensive source of information and expertise. The government is responsible for its decisions, but I think no one in this chamber would assume that the best way for the government to proceed by way of projections and forecasts would be to simply isolate themselves here on the Hill and come up with some figures independent of the input of experienced economists and others in the area.