Experts question whether costly Liberal plan will give expected economic boost
Posted Mar 22, 2016 05:14:23 PM.
This article is more than 5 years old.
OTTAWA – The Liberal government is planning to pile on more than $100 billion in public debt over the coming years as part of an ambitious strategy to revive economic growth.
But experts question whether Finance Minister Bill Morneau’s plan to stimulate the economy will have the desired effect.
The Liberals’ first budget predicts that big spending on investments like infrastructure will boost the country’s real gross domestic product by 0.5 per cent this year and one per cent in 2017-18.
Scotiabank chief economist and former senior Finance Department official Jean-Francois Perrault says the government’s growth projection for the next two years is a bit of a stretch.
Perrault also notes how the government’s five-year outlook does not specify when Ottawa will balance the books.
The budget projects deficits of $29.4 billion this year, $29 billion in 2017-18, $22.8 billion in 2018-19, $17.7 billion in 2019-20 and $14.3 billion in 2020-21.
Morneau says the plan will generate long-term growth and if conditions improve the budget could still be balanced in five years.
During the election campaign, the Liberals vowed to run annual deficits of no more than $10 billion and to balance the books by 2019-20.
