Edelman Canada shares a perspective on the 2016 Federal Fall Economic Statement Update. To learn more about Edelman Canada, please visit www.edelman.ca.
Trudeau Liberals Release Fall Economic Update Focusing on Infrastructure Spending
1. Edelman Ottawa | 155 Queen St. Suite 1302 | Ottawa, ON K1P 6L1 | 1.613.569.9000
As the Trudeau Liberals mark their first
year in government, expectations continue
to rise on their campaign promises while
Canada’s economic growth has stalled
throughout much of 2016. More mini-
budget than standard fiscal update, this
year’s Fall Economic Update seeks to both
meet at least some of those expectations
while highlighting results already achieved
since Budget 2016 and in broad terms lay
out a plan for economic growth.
Infrastructure spending and investing to
attract foreign investment remain the
priorities to create jobs and stimulate
the economy for the government.
New spending on new initiatives like a
separate Infrastructure Development
Bank and the Invest in Canada Hub are
the key takeaways. Minister Morneau’s
Advisory Committee on Economic
Growth previewed these, especially the
Infrastructure Development Bank to
leverage private sector investment in
public infrastructure projects.
A significant part of the Fall Economic
Statement focuses on investments from
Budget 2016 and signs of their success in
impacting middle class Canadians along
with non-monetary announcements related
to government transparency, such as
more independence for the Parliamentary
Budget Officer, Chief Statistician, and more
transparency for the Board of Internal
Economy which governs the affairs and
spending of the House of Commons itself.
With the release of this year’s fiscal
update, work has already begun on the next
budget. Predictions of an end to the so-
called honeymoon for the Trudeau Liberals
continue to be premature according to
polls, however a sustained period of low
economic growth will create an increasing
challenge for Minister Morneau leading into
Budget 2017.
2016 FEDERAL FALL ECONOMIC
STATEMENT UPDATE
OUR PERSPECTIVE
PROJECTED FEDERAL BUDGETARY BALANCE $ BILLIONS
-5.4
N/A
-1.0
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
SOURCE: DEPARTMENT OF FINANCE
Bob Richardson
Executive Vice-President & National Practice Lead
416.849.1913 | bob.richardson@edelman.com
Darcy Walsh
Senior Vice President & General Manager
613.569.9000 | darcy.walsh@edelman.com
Christopher Vivone
Senior Vice President
613.569.9000 | chris.vivone@edelman.com
PROJECTED
FEDERAL BUDGET (MARCH 2016)
FALL ECONOMIC UPDATE (NOV 2016)
ACTUAL
$6-BILLION
ADJUSTMENT
SET ASIDE
FOR RISK -29.4 -29.0
-22.8
-17.7
-14.3
-25.1
-27.8
-25.9
-19.3
-16.8
-14.6
2. Edelman Ottawa | 155 Queen St. Suite 1302 | Ottawa, ON K1P 6L1 | 1.613.569.9000
CHALLENGES
2016 FEDERAL FALL ECONOMIC STATEMENT UPDATE
STAKEHOLDER RESPONSE
HIGHLIGHTS
Infrastructure
›› The creation of The Canada Infrastructure Bank - An arm’s length organization
responsible for investing $35 billion in large infrastructure projects. $15 billion
from previously announced money and $20 billion through either equity, debt,
or a combination of the two.
›› This Bank could offer more flexibility for financing large projects, reducing
the cost to finance them and leverage private sector investment in public
infrastructure projects through reducing the risk.
›› An additional $81 billion over the next eleven years, much of it back ended, for
public transit, green and social infrastructure, transportation infrastructure that
supports trade, and rural and northern communities.
Attracting Investment and Talent
›› $218 million dollars to create the Invest in Canada Hub over five years to create
an organization responsible for selling Canada abroad as a destination for large
private sector investment.
›› By 2017, the threshold for review under the Investment Canada Act will be $1
billion, two years sooner than the earlier date of 2019.
›› A Global Skill Strategy to fast track approvals for low risk, high skill talent for
high growth Canadian companies and companies making large investments in
locating to Canada.
Deficits and Debt
›› The deficit for 2016-17 is expected to be $25.1 billion without a contingency
fund. In last spring’s budget, the government projected a deficit of $29.4 billion,
but that number included a $6-billion reserve.
›› Over five years, the government will add a total of $31.8 billion more in debt
than was expected in the last budget due to sluggish economic performance
and new spending.
›› While there is no commitment to get back to balance, the deficit is expected to
shrink to 14.6 billion by 2021-22.
ECONOMIC GROWTH
Economic growth will continue to be
unpredictable and uneven across the
country. Some regions may see some
opportunity for growth through increased
exports through trade deals like CETA,
while others continue to feel the impact of
low commodity prices.
RESOURCE DEVELOPMENT
In regions hard hit by those low
commodity prices, the government will
continue to face difficult litmus tests by
stakeholders and Provincial governments
on issues of resource development versus
fighting climate change.
“The Prime Minister promised that if he
borrowed billions of dollars, he could create
jobs and grow the economy. Today, Justin
Trudeau confirmed that his plan has failed.”
Hon. Rona Ambrose, PC, MP, Interim Leader of the
Conservative Party of Canada
“We are very hopeful that the new
Infrastructure Bank will focus on a range
of projects with varied size and scope so
that all provinces and municipalities across the country can
benefit. Canada’s life and health insurance industry stands
ready to play a major role in building our infrastructure.”
Frank Swedlove, President and CEO, Canadian Life and
Health Insurance Association (CLHIA)
“These unprecedented
infrastructure
investments will mean more growth, more jobs and stronger
communities. Municipalities are read to partner with this
government to deliver truly transformative returns on this
investment for all Canadians”
Clark Somerville, President,
Federation of Canadian Municipalities (FCM)