Federal Budget 2019: Lots more spending, nothing to improve competitiveness or productivity

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  • Budget 2019 is a pre-election document that sprinkles new spending across numerous domains. As such, most of the benefits are directed towards households, workers and students.
  • While the Budget lacks any clear theme, housing and support for skills development and new training are prominent features of the document.
  • The Budget fiscal plan has the government running deficits over the next five years and signals no intention of returning to balance. The annual deficits, however, are manageable as they amount to less than 1% of GDP.
  • Unfortunately, the Budget is silent on improving Canada’s competitive position. It contained nothing to indicate the federal government is concerned about Canada’s waning competitive position.
  • The Canadian economy is projected to grow by 1.8% in 2019, down slightly from 2018’s 1.9% pace. However, in light of recent data showing the Canadian economy stalled at the end of 2018, risks to the growth outlook are squarely on the downside.