Some federal government spending items outlined in this year’s budget and the 2022 Fall Economic Statement could be cut if economic pressures bring about “less fiscal room,” says Finance Minister Chrystia Freeland.
Boissonnault also said Ottawa still has “fiscal room to be able to do the things we need,” but added that “the fiscal room has tightened.”
“Is that the approach you’re taking to budgeting? That some spending items that your government has promised will be taken off the table depending on how the recession plays out this year?” the reporter asked.
“I think that’s the approach that governments should always take to putting together a budget,” Freeland replied. “If there’s less fiscal room, you can do less.”
The reporter noted that the current Liberal government has not practised that principle in the past.
“I disagree,” said Freeland. “I think that in the April [2022] budget and in the fall economic statement we were very very focused on taking a fiscally responsible approach.”
Economic Outlook
The day before Freeland made her comments, a report co-authored by former Bank of Canada governor David Dodge was released saying that the federal government was been overly optimistic in its economic outlook for 2023.Freeland also reiterated on Jan. 24 that Ottawa will continue sending military and financial support to Ukraine, adding that a clear victory over Russia “would be a big boost for the global economy and a big boost for Canada.”
“We’re supporting Ukraine because it’s the right thing to do ... but we are also supporting Ukraine because it is in our national interest to do so,” she said.