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

  • Toyota to add 400 jobs, sink $600M into Indiana SUV factory

    Economic CTV News
    DETROIT -- Toyota says it will add 400 jobs and invest $600 million at a Southern Indiana SUV factory. The announcement Tuesday comes just after President Donald Trump met with CEOs of the Detroit automakers to demand that new factories be built in the U.S. Source
  • Trump expected to OK Keystone XL and Dakota Access pipelines

    Economic CBC News
    President Donald Trump is expected to take executive action Tuesday to advance construction of the Keystone XL and Dakota Access oil pipelines. That's according to a person with knowledge of the action. The president is scheduled to sign orders at the White House late Tuesday morning. Source
  • Trump gives OK to Keystone XL and Dakota Access pipelines

    Economic CBC News
    U.S. President Donald Trump has signed executive orders to move forward on construction of two controversial oil pipelines that impact Canada, giving his OK to the Keystone XL and Dakota Access projects.Keystone XL will be approved 'in the first week': ExpertTrump presidency brings uncertainty for markets, economy in 2017Speaking in the Oval Office in the White House as he signed the orders, Trump said that "we are going to renegotiate some of the terms" of TransCanada's Keystone XL…
  • Ikea recalls beach chair globally after injury reports

    Economic CTV News
    COPENHAGEN -- Swedish furniture retailer Ikea is recalling a beach chair globally after receiving reports that it can collapse and cause injury, such as by pinching fingers. Ikea urges customers with any model of Mysingso beach chair to return them before Jan. Source
  • Trump to take executive action on Keystone XL, Dakota Access pipelines

    Economic CTV News
    U.S. President Donald Trump is expected to take executive action Tuesday to advance construction of the Keystone XL and Dakota Access oil pipelines. That's according to a person with knowledge of the action. The president is scheduled to sign orders at the White House late Tuesday morning. Source
  • Trump signs order advancing Keystone XL, Dakota Access oil pipelines

    Economic CTV News
    Photos U.S. President Donald Trump signs executive orders for the advancement of the Keystone XL and Dakota Access pipelines, Tuesday, Jan. Source
  • Trump signs Keystone order, but far from done deal

    Economic CTV News
    WASHINGTON -- The Keystone XL pipeline is back on -- maybe. President Donald Trump signed an executive order Tuesday potentially reviving the Canada-to-Texas pipeline, the subject of a multi-year saga that cast a long shadow over Canada-U.S. Source
  • CMHC: impact of GTA house prices being felt in wider circle of Ontario cities

    Economic CTV News
    TORONTO -- Canada Mortgage and Housing Corp. says the high price of housing in the Greater Toronto Area is having a widening effect on other Ontario real estate markets. CMHC says it appears that people have gone further afield to buy a single-family home such as a detached or semi-detached house. Source
  • Etihad Airways boss who led acquisition strategy on way out

    Economic CTV News
    DUBAI, United Arab Emirates -- Etihad Airways said Tuesday that the CEO of its parent company, who led an aggressive multi-year buying spree that saw the Mideast carrier snap up stakes in airlines from Europe to Australia, is leaving. Source
  • Saudi Arabia warns destructive computer virus has returned

    Economic CTV News
    DUBAI, United Arab Emirates -- Saudi Arabia is warning that a computer virus that destroyed systems of its state-run oil company in 2012 has returned to the kingdom, with at least one major petrochemical company apparently affected by its spread. Source