What Bill Morneau doesn’t want you to notice in the IMF’s report on the Canadian economy

Kevin Carmichael
Kevin Carmichael

Finance Minister Bill Morneau doesn’t want us looking too closely at his latest report card from the International Monetary Fund.

According to a press release from the Finance Department, the minister “welcomed” the fund’s “findings that ‘Canada has employed a judicious mix of policies to support inclusive growth and reduced vulnerabilities in the financial system.’”

Finance noted that the IMF “affirmed” that Canada posted the strongest economic growth in the Group of Seven in 2017, that the jobless rate had fallen to the lowest in 40 years, and that the government had done some things to boost productivity and competitiveness, including tax cuts on business investment. In a statement, Morneau said he was “proud” that the efforts of Prime Minister Justin Trudeau’s government “were being recognized internationally.”

Every year, the IMF sends a team of economists to most of its 189 member countries to assess the state of their economies and the efficacy of their mix of fiscal policy, monetary policy, and financial regulation. On May 21, the fund released the preliminary report of its Canadian team’s latest trip north from their base in Washington. (A lengthy final report will come later.)

It’s true, the IMF graders were generally satisfied with what they saw. But Morneau left out some stuff.

The IMF statement also said this: “Canada faces the challenge of attracting productivity-enhancing investment that both diversifies the economy beyond traditional sectors and takes full advantage of opportunities provided by new trade agreements.”

And this: “With (mortgage restrictions) working well, their effectiveness should not be diluted by home buyer initiatives that inadvertently increase household debt,” a comment that I read as disapproving dig at the sop for first-time homebuyers in Morneau’s latest budget.

Oh, and this: “To enhance its commitment to well-managed public finances, the federal government could explicitly incorporate a fiscal rule.”

full story at https://business.financialpost.com/news/economy/what-finance-glossed-over-in-its-response-to-the-imf-report-on-canadas-economy

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