After internet hosting an in-person assembly with the provincial and territorial finance ministers, Freeland mentioned U.S. President Joe Biden’s Inflation Discount Act, which incorporates electric-vehicle incentives that favour producers in Canada and Mexico in addition to the U.S., has modified the enjoying area on the subject of the worldwide competitors for capital.
The 2 large spending pressures on the federal authorities proper now are well being care and the worldwide transition to a clear economic system, Deputy Prime Minister and Finance Minister Chrystia Freeland mentioned on Friday, Feb. 3.
After internet hosting an in-person assembly with the provincial and territorial finance ministers, Freeland mentioned U.S. President Joe Biden’s Inflation Discount Act, which incorporates electric-vehicle incentives that favour producers in Canada and Mexico in addition to the U.S., has modified the enjoying area on the subject of the worldwide competitors for capital.
“I can’t emphasize too strongly how a lot I imagine that we have to seize the second and construct the clear economic system of the twenty first century,” Freeland mentioned throughout a information convention held on the College of Toronto’s Munk Faculty of International Affairs and Public Coverage.
“This can be a big financial alternative.”
Canada must put money into the transition with a purpose to doubtlessly have an outsized share within the economic system of the long run, she mentioned, or it dangers being left behind.
This 12 months particularly can be an necessary 12 months for attracting capital to Canada, she mentioned, calling for the provinces and territories to chip in.
“This can be a actually historic, once-in-a-generation financial second and it’ll take a workforce Canada effort to grab it.”
On the identical time, Freeland spoke of the necessity for fiscal restraint amid financial uncertainty.
“We all know that one of the vital necessary issues the federal authorities can do to assist Canadians right now is to be conscious of our duty to not pour gasoline on the fireplace of inflation,” she mentioned.
Freeland mentioned these two main spending pressures, which have been among the many subjects prioritized at Friday’s assembly, come at a time of a worldwide financial slowdown which poses restraint on authorities spending.
Prime Minister Justin Trudeau is ready to satisfy with the premiers Feb. 7 to debate a long-awaited deal on health-care spending. The provinces have been asking for will increase to the well being switch to the tune of billions of {dollars}.
Freeland mentioned it’s clear that the federal authorities must put money into well being care and reiterated the federal government’s dedication to doing so however wouldn’t say whether or not she thinks the quantity the provinces are asking for in elevated well being transfers is possible.
“It’s time to see the numbers,” Québec Finance Minister Eric Girard mentioned Friday afternoon, in anticipation of the Feb. 7 assembly.
The assembly of the finance ministers comes at a tense time for a lot of Canadian customers, with inflation nonetheless operating sizzling and rates of interest a lot greater than they have been a 12 months in the past.
The ministers additionally spoke with Financial institution of Canada governor Tiff Macklem and mentioned the financial outlook for Canada and the world, mentioned Freeland.
“We’re very conscious of the uncertainty within the world economic system proper now,” mentioned Freeland. “Inflation is excessive and rates of interest are excessive.”
“Issues are robust for lots of Canadians and plenty of Canadian households right now and on the federal degree, this can be a time of actual fiscal constraint.”
The Financial institution of Canada raised its key rate of interest once more final week, bringing it to 4.5 per cent, however signalled it’s taking a pause to let the influence of its aggressive climbing cycle sink in.
The economic system is exhibiting indicators of slowing, however inflation was nonetheless excessive at 6.3 per cent in December, with meals costs particularly remaining elevated 12 months over 12 months.
Rates of interest have put a damper on the housing market, sending costs and gross sales downward for months on finish at the same time as the price of renting went up in 2022.
In the meantime, the labour market has remained robust, with the unemployment fee nearing file lows in December at 5 per cent.
This report by The Canadian Press was first printed Feb. 3, 2023.
