WATCH: Prudent to include contingency funds for possible challenges around the corner: Bill Morneau
Last year, the Liberal government said its inaugural budget would help spur the creation of 100,000 jobs in Canada. But 12 months later, Finance Minister Bill Morneau is having trouble proving that it worked.
In an interview with The West Block‘s Vassy Kapelos, Morneau was pressed about the promise in the wake of the government’s second federal budget, tabled last Wednesday.
“I would like to identify what’s happened over the last year,” Morneau said.
“We’ve gone from a 7.1 per cent rate of unemployment to a 6.6 per cent rate of unemployment during the time that we’ve been in office. The last seven months we’ve seen a net 250,000 [jobs added] in our country and that’s the largest seven-month period in the last decade.”
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But Morneau wouldn’t equate those numbers directly to his 2016 budget. He also acknowledged that the 0.5 per cent increase in economic growth over the past year is “a little shy of what we thought.”
“We’re starting to see some positive trends,” the minister added. “I know that Canadians are watching closely to make sure that we are doing the things that we should be doing to manage our economy well.”
Last spring, the Parliamentary Budget Officer flagged the 100,000-jobs pledge as potentially problematic, noting that the estimates were conjured solely by the government. The jobs estimate should have been closer to 60,000, the PBO noted.
Kapelos also asked Morneau why the Liberals are adding a $3-billion contingency fund back into their balance sheet this year, providing a cushion for the government’s finances if things don’t go as planned in 2017-18.
“Now we’re looking at Year Two, the second chapter in our plan, and we realize that there are some potential upsides … but we always have to consider downside risk,” Morneau explained.
“My view is that’s the right way for us to move forward.”