Freeland to release fall fiscal update just days before break

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Finance Minister Chrystia Freeland has set Dec. 14 as the release date for a fall fiscal update, which will be the first formal revision of the federal government’s economic forecast since the April budget.

Opposition MPs quickly noted that the timing means the new information will be released just days before Dec. 17, when the House of Commons is scheduled to break for the holidays and not return until Jan. 31. This, they argued, will limit members’ ability to raise questions about the government’s spending plans.

The Liberal government is facing increasing criticism over financial transparency. In addition to the fiscal update, it has yet to release the public accounts for the previous fiscal year, which would provide a detailed breakdown of how Ottawa spent about $600-billion during the height of the COVID-19 pandemic.

“We know it’s important to Canadians that we are careful and transparent with our nation’s finances,” Ms. Freeland told the House of Commons Thursday while announcing the timing of the update. The minister did not take questions from reporters afterward.

The House of Commons is nearly halfway through a four-week stretch of sitting days after having been on hiatus since June. Opposition parties had urged the government to schedule sittings much sooner after the Sept. 20 election, which returned the Liberals to power with a minority Parliament.

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Former Parliamentary Budget Officer Kevin Page told The Globe and Mail this week that key financial information such as the public accounts and the fiscal update should have been released at the start of the current four-week stretch in order to give MPs more time to scrutinize the information and ask questions in Parliament.

Fiscal updates are documents that outline the latest projections for federal tax revenues and government spending and use those figures to produce new forecasts for the expected size of the deficit and the federal debt. Updates are sometimes used to announce new policy measures.

Conservative MP and finance critic Pierre Poilievre predicted Thursday that the Liberals will use the document to launch new spending.

“It looks like the Trudeau government wants to deliver a big sack of inflationary coal for every family just in time for Christmas,” he told reporters Thursday after Ms. Freeland’s announcement. “We think that the government should have been more organized to get into Parliament and announce a fall economic update earlier on, so that we can get the deficit down and restore the cost of living.”

NDP MP Alexandre Boulerice also took issue with Ms. Freeland’s timing.

“They are dragging their feet. It took two months to come back here to work in Parliament,” he said. “They are waiting [for the] last week before the Christmas break to do that. People outside, the families, the seniors – they are suffering. People are really struggling to pay their bills, to pay the groceries, to pay their rent, and this Liberal government is completely out of touch. They are not answering the real needs of the people out there.”

Conservative Leader Erin O’Toole raised the issue of the public accounts during Question Period, asking “Why is the government covering up its out-of-control spending?”

Ms. Freeland, who stood in for Prime Minister Justin Trudeau Thursday in the House, accused the Conservatives of hypocrisy on deficit spending.

“Over the past 10 days we have heard a lot from the Conservatives about government spending, which they now deem to have been excessive. But just a few weeks ago, on the campaign trail, the Conservatives proposed government spending in this fiscal year that was higher than what we proposed,” she noted. She called the Conservatives the “party of flip-flops.”

The government and the opposition parties are currently negotiating the timelines for establishing the various Commons standing committees, which are responsible for reviewing government legislation and spending proposals from federal departments.

The launch of the finance committee will be prioritized, according to the terms of an all-party agreement announced on Thursday afternoon. That committee will be responsible for quickly reviewing C-2, a government bill introduced by Ms. Freeland that would change COVID-19 benefits.

A vote to send C-2 to committee was passed in the House Thursday 183 to 129, with Bloc Québécois MPs voting in favour of the bill with the Liberals. The Conservatives and New Democrats voted against.

The bill would implement changes that the government originally announced in October. Those changes included an end, as of Oct. 23, to the Canada Recovery Benefit, a pandemic-relief program for individuals. At the same time, the government announced that it would continue to provide wage and rent subsidies for pandemic-affected businesses, but in a more limited form than in the past, and only for those in hard-hit sectors.

The bill includes a provision to pay a $300-a-week Canada Worker Lockdown Benefit to individuals in the event that the regions they live in impose temporary lockdowns prior to May 7, 2022.

The federal government’s April budget estimated the size of last year’s deficit at $354.2-billion and projected the deficit for the current fiscal year, which ends on March 31, 2022, would be $154.7-billion.

Last Friday, Ms. Freeland met virtually with some private sector economists – including chief economists with Canada’s largest banks – to discuss economic trends ahead of the fall fiscal update. In interviews with The Globe, several of the chief economists said the fiscal projections in the budget likely remain a reliable guide, while cautioning that the government may still announce new spending before the end of the fiscal year.

Pedro Antunes, who is chief economist of the Conference Board of Canada and was a participant in Friday’s meeting, said on Thursday that he doesn’t expect the fall update forecasts to be dramatically different from the projections in the budget.

“I don’t think there’d be too many surprises,” he said. “I think we’ll probably see something that aligns with what the government’s been projecting all along, which essentially is two massive years of deficit that we’re going to have to contend with for the future.”

Mr. Antunes said his policy advice for the Finance Minister would be to avoid adding new spending to sectors of the economy like construction that are already “hot” and experiencing labour shortages. He also said the government should adopt a more aggressive timeline for reducing the size of the debt relative to the economy so that Ottawa has the room to respond to future emergencies.

“How are we going to manage the next crisis if we don’t reduce our debt to GDP ratios?” he said. “The sooner the better, I would suggest.”

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