Tumbling oil prices put pressure on finance minister to act

With the price of oil hovering around $30 a barrel and dragging the loonie down with it, Finance Minister Bill Morneau is facing increasing pressure to act.

See Full Article

Conservative Finance Critic Lisa Raitt has urged immediate action, rather than waiting for the release of the budget, for which Morneau has not yet publicly set a date.

“The finance minister should be treating it more as a crisis,” Raitt told CTV’s Power Play.

Raitt said the Liberals ought to be “taking a look at whether or not all those spending promises that were made during the campaign are something that should happen now or be parked for a future time.”

“There’s not a lot of tax revenues that are going to be coming in and digging a huge hole right at the beginning of a mandate that is going to make it very difficult to react should something worse happen,” Raitt added.

Raitt said the Liberals have an opportunity for growth that her government did not enjoy when it faced the economic recession in 2009: a growing U.S. economy.

“As an exporting nation with them as our largest partner, I’d be doubling down to ensure that we’re doing the best we can to get our products into that American market,” Raitt said, adding she would focus on agriculture, forestry and “cutting red tape.”

Earlier in the day, Morneau told reporters in Montreal that he continues to view the Liberal campaign platform as the best way to grow the economy.

“We think by lowering taxes for the middle class, by adding the Canada Child Benefit, by investing significantly in infrastructure, that’s the right thing to do,” he said.

Morneau added that the middle class tax cuts that took effect Jan. 1 are already “putting more money in the pockets” of nine million Canadians, who can spend it, stimulating the economy.

The minister would not say whether the Liberals will go deeper into deficit than the $10-billion promised during the election campaign, adding “I have not yet written the budget.”

NDP Finance Critic Guy Caron, meanwhile, told CTV Power Play that he agrees with the Liberals’ plan to invest in infrastructure and tax cuts to stimulate the economy.

However, Caron said the tax cuts should have gone to lower-income Canadians because the upper middle class might not spend the money.

Both the NDP and Conservatives vowed during last year’s election campaign to balance the budget, while the Liberals said “modest deficits” would allow them to invest in projects that grow the economy.

But as Morneau pointed out in a speech Monday, the price of oil has fallen by half since the election campaign, meaning the government is now projecting a $15 billion per year drop in GDP starting this year, compared to what was projected in the last budget.

Carleton University Professor Ian Lee told CTV News Channel that the oversupplied global energy could force the price of oil even lower, to $20 a barrel, if lower-cost producers like Saudi Arabia keep pumping.

"It's a game of global chicken," he said. "We're really waiting to see who is going to blink first."



Advertisements

Latest Economic News

  • British Airways cancels flights amid global computer outage

    Economic CTV News
    LONDON -- British Airways cancelled all flights from London's Heathrow and Gatwick airports Saturday as a global IT failure caused severe disruption for travellers on a busy holiday weekend. The airline said it was suffering a "major IT systems failure" around the world. Source
  • Computer outage grounds hundreds of British Airways flights in London

    Economic CTV News
    LONDON -- British Airways cancelled all flights from London's Heathrow and Gatwick airports on Saturday as a global IT failure upended the travel plans of tens of thousands of people on a busy U.K. holiday weekend. Source
  • British Airways outage spurs London travel chaos; power issue blamed

    Economic CTV News
    LONDON -- British Airways cancelled all flights from London's Heathrow and Gatwick airports on Saturday as a global IT failure upended the travel plans of tens of thousands of people on a busy U.K. holiday weekend. Source
  • Broker, agent who worked with subsidiary of Home Capital disciplined

    Economic CBC News
    An Ontario regulator says it has imposed disciplinary actions against a mortgage broker and agent who worked with Home Trust Co., a subsidiary of Home Capital Group, over their handling of mortgages. The Financial Services Commission of Ontario (FSCO) says it conducted a review of 45 mortgage brokers and agents that Home Capital cut ties with after they were accused of falsifying income information several years ago. Source
  • Calgary man on lam in Mexico sentenced to 3 years in $27M mortgage fraud

    Economic CTV News
    CALGARY -- A Calgary man who was arrested after being on the lam for two years in Mexico for his part in a $27 million mortgage fraud has been sentenced to three years in prison. Source
  • Nortel Canada to start paying billions to creditors

    Economic CBC News
    Nortel Canada's long-suffering creditors will finally begin to receive their share of more than US$4 billion to be distributed under a plan approved in January, eight years after the former technology titan began bankruptcy proceedings. Nortel Networks Corp. Source
  • Nortel Canada to start paying billions to creditors; first instalment by July

    Economic CTV News
    TORONTO - Nortel Canada's long-suffering creditors will finally begin to receive their share of more than US$4 billion to be distributed under a plan approved in January, eight years after the former technology titan began bankruptcy proceedings. Source
  • Que. construction strike: Day 3 kicks off with little to show at bargaining table

    Economic CTV News
    MONTREAL -- There is little progress to report at the table as Quebec's construction strike enters Day 3. Eric Cote, a spokesman for one association of employers, says negotiations resumed late Thursday and that representatives for his group emerged early today suggesting they were a waste of time. Source
  • Ford's ex-CEO leaves company with $51.1M US

    Economic CBC News
    Ford's former CEO Mark Fields is leaving the company with an estimated $51.1 million US in cash, stock awards and pension benefits. Fields, 56, retired earlier this week after three years as CEO. Ford made record profits during his tenure but its stock price dropped nearly 40 per cent on investors' concerns about the company's future. Source
  • Ford's ex-CEO leaves company with US$51.1 million

    Economic CTV News
    DETROIT -- Ford's former CEO Mark Fields is leaving the company with an estimated US$51.1 million in cash, stock awards and pension benefits. Fields, 56, retired earlier this week after three years as CEO. Source