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Finance Minister Chrystia Freeland provided an update to federal finances on November 30. The economic outlook is sobering, but not surprising. The fiscal deficit is up a bit from July numbers – to an eye watering $381B – with an acknowledgement that it could go slightly higher before the fiscal year is out. This puts the share of debt to the economy at around 50 per cent. Those arguing for a fiscal anchor or guardrails are disappointed (as we are) although we do have an acknowledgment of the need to “return to a prudent and responsible fiscal path” post pandemic.
The list of items announced in the Speech from the Throne haven’t made it through to the update but we do have the first view of the forward path with the government indicating they expect to spend 3-4 percent of GDP or $100B over several years as part of a stimulus package to jumpstart the economy. For all the talk of a ‘green recovery’ the actual monies here are disappointingly unambitious (less than $5B over the next five years) and a better (but reasonable) plan is hopefully in the offing. As well, childcare would seem to have taken a back seat – to both help struggling families now while pressing an economic lever in the recovery – with only a small downpayment for a secretariat to study the issue further.
In summary, we need a better plan – the stimulus plan is not yet well defined and needs to target those areas that deliver productive growth. Second, we need that plan to be constrained to make sure spending is contained by some economic guardrails and is therefore sustainable. Finally, we need this plan to provide transparency and accountability. The spring budget is an opportunity to do so.
By David Murchison, Senior Vice President, International and Iraq
David Murchison has broad experience in both the public and private sectors. This work has covered strategic planning, organizational design and development, policy development, operations and programming evaluation. He has been responsible for work encompassing the energy sector, economic development, the financial sector, small business and infrastructure to name a few.
David retired from the federal public service in October 2018, where his last position was Assistant Deputy Minister – Policy at Infrastructure Canada. Immediately prior he was Canada’s Executive Director at the Asian Development Bank based in the Philippines. He was with Finance Canada’s Financial Sector Policy Branch for most of his time in the public sector, beginning in the mid 1990’s. He began his career at Imperial Oil in Toronto and held various management positions in the downstream business before leaving to run a mid-sized electronics business, also in Toronto. A little later, he and his spouse sought out Ottawa to better balance work and life with what was then a young family.
His consulting assignments have been largely focused in the financial sector, both domestically and internationally.
David has an MA in Economics from Queens University, Kingston Ontario. He completed the Institute of Corporate Directors program in Asia in 2016. David lives in Ottawa with his spouse Helga Ehrlich, a family doctor. They have 3 sons.
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