Trudeau government’s economic forecast: ‘We may have bad surprises’

The Trudeau government’s economic update on Thursday contains some elements that could cause problems in the coming years.

• Read also: Economic update: Canada could enter a recession next year

• Read also: Economic statement: “The government has turned its back on the people,” says Singh

The Canadian Business Council’s vice president for public policy, Robert Aslin, sees “two major problems with expectations.”

First, do not expect a recession. “We expect growth over the next five years,” Mr. Asselin said in an interview with Le Bilan.

The average for the next five years will be higher than what has been seen as growth over the past 20 years, which, according to the specialist, is “absolutely unlikely.”

The interest rate included in the Ottawa outlook is also problematic.

“We expect interest rates to fall to 3%, which in my opinion also, given the inflationary surge we are seeing at the moment, seems very unlikely to me,” explains Mr. Asselin.

A small change in one of these two variables could lead to a scramble for the Trudeau government.

“If we change these two parameters, say a big recession or a great recession in 2023, or higher inflation that lasts longer than we think, say with rates of 4% or 5% and the federal government, we have to understand that its debt refinancing is constantly, we will have Bad surprises,” the vice president supports.

Robert Aslin emphasizes that one must be careful about long-term forecasts.

“You have to be careful with the long-term outlook. We keep adding expenses to every budget, and that’s also not expected in the 3-4-5 years of the economic forecast presented to us today.

“Let’s take today’s forecast with extreme caution,” the expert adds.

Watch the full interview in the video above.