Recently Statistics Canada released the GDP, income and expenditure report for Canada’s second quarter revealing some troubling indicators.
Real GDP growth decreased .4% and while that may not seem like a significant drop, it is the largest quarterly decline since 2009.
Another area of concern is business investment that has continued to decline for the last several quarters. Looking at the numbers from a sector by sector perspective construction has declined while the public sector has increased in size.
Fortunately there are some promising indicators with some growth in manufacturing output along with an increase in mining along with oil and gas extraction.
For many of these reason the Bank of Canada announced the key interest rate will remain at .5% with a forecast for increased GDP growth in the next fiscal quarter.
I mention some of Canada’s fiscal indicators in this week’s report as I believe it is critically important that fiscal policy is not overlooked in this coming Parliament that will resume in a few weeks on Monday, Sept. 19. We should not overlook that much of the government’s debt forecasts that already show a significant increase in debt are also depending on positive economic growth to help offset significant increases in spending.
In the case of the 2013-14 fiscal year, over $28 billion was spent just on debt servicing alone. To put that number into context, the total amount of health transfers from the Federal Government to the Provinces and Territories in the same fiscal year was $32 billion.
If the Liberal gpvernment continues to dramatically increase debt as is currently forecast and economic growth does not increase as is anticipated a serious fiscal crunch will emerge that will impact federal government finances at a time when the population is significantly aging with health care costs expected to increase dramatically.
The intent of this week’s report is not to cast doom and gloom as overall at the moment Canada is relatively strong compared to other G-7 nations.
However the current direction away from balanced budgets and into increased spending while ignoring policies and projects that create investment, employment and increased economic growth is a concern.
In June, I tabled a motion to immediately elevate the Comeau decision to the Supreme Court for constitutional clarification that could potentially significantly increase internal trade between Canadian provinces.
Despite having the support of the Conservative, NDP and Green Party MPs, something that rarely occurs in the House of Commons, even this modest economic motion was opposed by the Liberal government.
I have received a great deal of positive comments from constituents on reducing interprovincial trade barriers as well as other suggestions to help grow our economy over my summer listening tour.
In this regard my summer listening tour has been successful as I believe that the best ideas come from those closest to challenges or opportunities and why it’s critical for elected officials to hear those ideas and suggestions first hand. It is important to me to propose and not just oppose while in Opposition and I will continue to bring motions forward that can increase internal trade and help local producers to have unrestricted access to all Canadian provinces.
I welcome your comments, questions and concerns on this or any matter related to the federal government and can be reached via email at Dan.Albas@parl.gc.ca or toll free at 1-800-665-8711.