On a tornado two-day tour of Europe in mid-March, Chrystia Freeland spent a day and a half meeting with top German officials in Berlin, including Chancellor Olaf Solz, and then flew to Warsaw with Prime Minister Justin Polton. The trip ended with a meeting late at night with US Vice President Kamala Harris. The next day at 7 a.m., the deputy prime minister, who has also doubled as finance minister, was on a flight home to Toronto. That afternoon, Ms. Freeland had virtual late-night meetings with Deputy Treasury Secretary Michael Sabia, a former top corporate executive, and senior Treasury executives. Discussions focused on tax measures in the next budget and in the context of Ottawa revenue and expenditure, according to a senior federal official. The government has pledged to be guided by a fiscal anchor, which it defines as keeping federal debt as part of a declining economy. Officials discussed the pace of this downturn in light of the latest economic figures and government spending plans. The day before she left for Europe, Ms. Freeland met with 20 feminist organizations for advice on what they would like to see in the budget, followed by a meeting of finance officials for innovation policy, a key business development plan in April 7 budget. A federal budget wish list The Minister must always tell the Liberals that they can not have everything The first part of each calendar year is always frantic at the Jim Flaherty Building on Elgin Street in Ottawa, where the federal Treasury is located. But having a finance minister who is also deputy prime minister and shouldering other heavy dossiers piling up for the challenges for finance officials working on the 2022 federal budget. The Globe and Mail spoke with 15 government officials, business executives and policy experts about the difficulty of drafting the first budget for a post-pandemic economy while working on other important dossiers. The Globe did not identify some of the sources because they were not authorized to discuss the matter. The protracted impact of the Omicron variant – which delayed hopes of a full opening up of the Canadian economy – as well as the Russian invasion of Ukraine and the weeks-long truckers’ protest took valuable time away from Ms. Freeland’s budget work. The unprecedented use of the emergency law to disperse protests between countries included a significant financial component of working with banks and the RCMP to freeze the accounts of key participants. For Ukraine alone, Ms. Freeland held daily meetings with Ukrainian leaders and finance ministers from major Western economies to ready-made punitive economic sanctions against Russia. Ukraine had recruited Ms. Freeland, who speaks fluent Ukrainian and Russian, to back the alliance between the Russian Federation and the Central Bank, cutting off access to its vast foreign exchange reserves, which Moscow could to use to offset the impact of Western sanctions. During a tumultuous two-month period, Ms. Freeland held 107 budget meetings with business executives, employee leaders, economists and various stakeholder organizations, according to a government official. However, a former senior government official in Trinto said Mrs Freeland’s focus on Ukraine had delayed the preparation of the 2022 federal budget. which may slow down the process of key budget decisions. Complicating matters was the last-minute deal that Mr. Trinto negotiated with the NDP to support the government until June 2025. The parliamentary cooperation agreement commits the government to billions of dollars in new and ongoing spending on social programs such as dental care. and pharmaceutical. Add to that the pressure on Mr. Trinto from NATO allies to significantly increase spending on national defense, and the 2022 budget is costly, even as the country emerges from the worst of the pandemic and support programs have closed. Former Liberal Finance Minister John Manley, who also served as Jean Chrétien’s deputy prime minister, said he was concerned that the Liberal-NDP alliance was “all about spending” and that it did not have metrics to ensure accountable management. . Real GDP per capita growth Canada, quarterly, 1961-2020 the globe and mail, source: scotiabank Economics; Statistics of Canada Real GDP per capita growth Canada, quarterly, 1961-2020 the globe and mail, source: scotiabank Economics; Statistics of Canada Real GDP per capita growth Canada, quarterly, 1961-2020 the globe and mail, source: scotiabank Economics; Statistics of Canada “Taxes and spending are not a development agenda. “Over time, it will shrink the economic pie and hinder Canada in our investment competition,” he said. A recent Scotiabank report estimates that the Liberal-NDP pact will add another $ 15 billion to $ 20 billion over the three-year deal – and possibly $ 40 billion by 2027. Next Thursday’s budget has three main themes, according to a senior source: measures to support the growth of the green economy, affordable housing and Canada’s role in the world. The latter is a recent addition that will see Ottawa boost defense spending in response to Russia’s invasion of Ukraine. It will also include money for cyber security to combat foreign misinformation campaigns. The Liberal electoral platform has pledged $ 4 billion to build 100,000 new homes by 2025, with Ottawa giving money directly to municipalities to speed up new housing. It also pledged another $ 2.7 billion to repair and build affordable housing. Other big items include $ 9 billion for a range of climate programs and billions for green economy initiatives such as clean technology and investments in zero-emission vehicle construction. The Scotiabank report also expects another $ 12 billion to supplement defense spending. Many private sector economists say Ms. Freeland will have the good fortune of an unexpected income thanks to strong corporate balance sheets and rising commodity prices. High inflation is also helping the government’s results in the short run, although expected interest rate hikes are a source of concern in the long run. Huge spending during the pandemic has almost doubled the federal debt, which is projected to reach $ 1.25 trillion in 2022-2023. Incentive spending around the world – coupled with the supply chain bottlenecks associated with the opening up of the global economy – has fueled a prolonged rise in inflation. Canada brings the setbacks Projected increase in real GDP per capita, CAGR *, OECD countries, 2020-2030,%

  • Complex annual growth rate the globe and mail, Source: business Council of British Columbia; ΟΟΣΔ Canada brings the setbacks Projected increase in real GDP per capita, CAGR *, OECD countries, 2020-2030,%
  • Complex annual growth rate the globe and mail, Source: business Council of British Columbia; ΟΟΣΔ Canada brings the back Projected GDP growth per capita, CAGR *, OECD countries, 2020-2030,%
  • Complex annual growth rate the globe and mail, Source: business Council of british columbia; ΟΟΣΔ The risk of raising more money in an already hot economy could further boost inflation, forcing the Bank of Canada to raise interest rates – something voters are likely to blame for Freeland. “What we can not afford is another round of new spending being paid off with borrowed money,” said Perrin Beatty, president of the Canadian Chamber of Commerce. The Liberal-NDP agreement approved Mr Trudeau’s promise to impose a three per cent corporate tax increase on Canadian banks and financial institutions, and the NDP is pushing to extend the tax to oil and gas. “Hitting new businesses with successful taxes during the pandemic is not a way to attract new investment,” said Beatty. Ms. Freeland faces growing frustration with Bay Street and the Liberal Party’s most business-friendly wing that the current version of the government has turned far to the left, abandoning the party’s financial credentials, which were hard earned by balancing the books of the 1990s. “I am concerned that the emergency during COVID may have raised some concerns about the risks of over-indebtedness and structural deficit widening,” said Manley, who serves on the boards of CIBC and Telus. . “Interest rates are rising and tax levels are already high, so flexibility is limited.” Economist Armine Yalnizyan, Atkinson’s associate for the future of workers, disputes the prevailing argument by business groups and other fiscal commentators that the wave of new federal social programs is inaccessible. Ms. Yalnizyan says programs like Child …