Controversy over holiday tax exemptions and money distribution plans, with differences of opinion between Trudeau and the finance minister
Recently, Federal Treasury Secretary Fang Huilan stated that the autumn economic report will be released next week. There are reports that the tense relationship between Prime Minister Trudeau and Deputy Prime Minister and Finance Minister Fang Huilan has once again escalated, triggering new questions about how big the federal deficit will be in next week's economic update.
According to CTV reports, unnamed sources have stated that there is a disagreement between Trudeau and Fang Huilan regarding the economic viability of measures such as temporarily waiving GST/HST for two months and the pending $250 worker welfare check. If the above two policies are fully implemented, the two holiday affordability plans are expected to cost CAD 6.3 billion.
A senior government source stated that there is tension and some frustration between the two sides, but it is not enough to make the working relationship difficult to maintain.
Another senior Liberal Party official disagreed with describing the two as "at odds" and stated that in their view, Trudeau and Fang Huilan's offices have a good working relationship, and difficult conversations are a natural part of formulating policy documents such as the autumn economic statement.
This is not the first time there has been friction between the Prime Minister's Office (PMO) and the Freeland office. According to reports, senior officials in the Prime Minister's Office expressed concerns about the economic communication ability of Fang Huilan this summer.
At the time, Trudeau claimed that he still had "confidence" in Fang Huilan, but pointed out that he had been negotiating with Mark Carney about entering federal politics. A few months later, the Liberal Party announced that the former Governor of the Bank of Canada would join as a special advisor to serve as the Chair of the Economic Growth Working Group.
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On Tuesday, Fang Huilan attempted to downplay the claim that she and Trudeau had a dispute over expenses.
During Tuesday's congressional questioning session, Conservative Party leader Boris Johnson stated, "She (Fang Huilan) wants the deficit to reach 40 billion Canadian dollars. And he (Trudeau) wants the deficit to be even larger, over 40 billion Canadian dollars. We know Canadians will suffer losses due to inflation, but who among them will win
Fang Huilan will not promise to achieve the deficit target
Earlier that day, when asked if she would meet a key fiscal requirement set in the spring budget for next week's economic update - to keep the 2023-24 deficit at $40.1 billion or below, Fang Huilan said, "I won't comment on anonymous statements, rumors are everywhere in the city now. The ratio of debt to GDP is our fiscal pillar
Fang Huilan also stated that the fiscal pillar to be maintained in the autumn economic statement will be to reduce the proportion of federal debt to the economy.
I choose my wording carefully because it is important for Canadians to be clear about this. It is also important for the capital market to be clear about this, "said Fang Huilan.
If the proportion of your debt to the economy is decreasing, then by definition, your financial situation is sustainable, which is really important
The Liberal Party has hinted that it may exceed its deficit target in exchange for additional affordability measures and may invest huge amounts of money in new border measures, which has raised concerns among some economic observers.
Robert Asselin, Senior Vice President of the Business Council of Canada and former Budget Director of former Finance Minister Bill Monor, stated that this indicates that the current government is "doing it while walking".
This is the third time in four years that the Minister of Finance has failed to achieve his fiscal goals, "Asselin said. They have been changing their fiscal goals. To be frank, this sends a terrible signal to Canadians, investors, and the debt market seeking stability during turbulent times
He said that the failure to achieve the goal in the face of the possibility of economic weakness and the threat of high tariffs by US President elect Donald Trump indicates that "rainy days have arrived and we are not yet prepared
As for whether Trudeau's latest affordability package can be seen as spending that can justify larger deficits, Asselin said that these measures will not have a "structural impact" on the economy.
It's like a lollipop. You know it's great when you eat it. It feels great, but an hour later, you still feel hungry. Our economy is the same. We need more productivity, more innovation, and these expenses are not helpful in achieving this goal
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https://www.ctvnews.ca/politics/which-one-of-those-two-is-going-to-win-poilievre-prods-trudeau-freeland-over-spending-tension-1.7140750