Carney says to expect 'austerity and investment' in upcoming fall budget

OTTAWA — On a warm, sunny Wednesday morning in Toronto’s North York, Prime Minister Mark Carney said the “a” word most politicians balk at pronouncing.

Carney revealed that “austerity” was on the menu for his government’s first budget this fall while speaking to reporters before chairing a two-day cabinet retreat in Toronto.

“It’s an austerity and investment budget at the same time, and that’s possible if we are disciplined,” Carney said in French. “We can do both, and we will do both.”

“We need discipline for our spending, it’s necessary. For example, the rate of increase of federal government spending in the last decade was over seven per cent year over year. That’s faster than the rate of growth of our economy,” he added in an apparent swipe at his Liberal predecessor Justin Trudeau.

“We need to rein in spending, we need to find efficiencies… that create the room for these big investments.”

With that in mind, austerity is “necessary”, he noted. But at the same time, he promised the government would invest in the Canadian economy, workers and society.

He also said that some sectors would be “untouchable,” such as health care, education transfer payments as well as direct payments to individuals (such as Old Age Security).

Last week, federal ministers submitted their departments’ and agencies’ plans to cut their spending by 15 per cent within three years. Only a handful of organizations were spared or had a reduced target, such as the RCMP and the Department of National Defence.

But little else is known of Carney’s first budget, which originally wasn’t expected this year until public outcry pushed the prime minister to promise a fiscal plan this fall.

Multiple departments have already announced staffing reductions as part of their spending reviews, setting the stage for a showdown between Carney’s Liberals and powerful public sector unions over the coming year.

Wednesday, Carney also announced that he had “very constructive” conversation with U.S. President Donald Trump Monday. He said both countries are working on smaller sector-specific deals as Canada pushes for the U.S. to drop its tariffs on steel, aluminium, autos and lumber.

More to come.

National Post

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