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Thursday, March 24, 2016, Chaitra 10, 1422 BS, Jamadius Sani 14, 1437 Hijri


Trudeau takes Canada back into the red to boost growth
Published :Thursday, 24 March, 2016,  Time : 12:00 AM  View Count : 20

OTTAWA, March 23: Canadian Prime Minister Justin Trudeau's Liberal government announced Tuesday massive spending to try to force an end to years of stagnant growth recently compounded by the oil rout.
The proposed budget projects a deficit of Can$29.4 billion ($22.5 billion US) this year. The government says it hopes to boost growth by 0.5 per cent in 2016- 2017, and by 1.0 per cent the following fiscal year.
Critics, however, say the scheme will create a larger government, not jobs.
The opposition Tories also blasted the finance minister for squandering a small surplus inherited from the previous Tory administration.
But the Liberals would have none of it.
"Today, we begin to revitalize the economy," Finance Minister Bill Morneau told parliament as he unveiled his first budget, signaling a hard break from austerity measures of the past.
Economic growth has been weaker than hoped for several years, slowing to 1.4 per cent for 2016.
Private sector economists forecast it will rise to 2.2 per cent next year (before factoring in the stimulus).
In his speech, Morneau recalled the post-world wars glory days, contrasting a then booming economy with the struggles facing millennials. Morneau reasoned that with interest rates at near historic lows (0.5 per cent), there is no better time to borrow for the future.
Some economists also argue that the central bank has little wiggle room to stimulate the economy through monetary policy, so it is up to the government to step in.
Morneau earmarked billions of dollars in expenditures for new mass transit, water treatment plants and sewers, roads and bridges, social housing, modern research labs and student grants, and faster Internet connectivity.
He said Ottawa would build schools and hire more teachers in aboriginal communities to help lift them out of severe poverty.
There are also monies (Can$2 billion) for a climate change strategy that remains largely undefined as Ottawa negotiates CO2 emissions cuts with the provinces.
Morneau also extended unemployment benefits to oil producing regions hard hit by the plunge in oil prices, and set aside funding to resettle at least 10,000 more Syrian refugees this year.
Purchases of new fighter jets and warships, meanwhile, were deferred until after the next election. And there was no new funding commitment to public safety.
Government revenues are forecast to fall slightly to Can$287.7 billion before rising in subsequent years, while expenses soar to Can$317.1 billion.
By the end of the Liberals' current mandate in 2019, Morneau vowed Canada's debt-to-GDP ratio -- which is already the lowest of any G7 nation -- "will be lower than it is today."    ?AFP










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