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Freeland meets with finance ministers | “We must seize this opportunity and build the clean economy of the 21st century”



(Toronto) The two spending areas putting the biggest strain on the federal government right now are health care and the global transition to a clean economy, Deputy Premier and Finance Minister Chrystia Freeland said Friday.

Speaking after a face-to-face meeting with provincial and territorial finance ministers in Toronto, Freeland claimed that US President Joe Biden’s Cut Inflation Act, which includes incentives for electric motor vehicles that favor manufacturers in Canada and Mexico, as well as the United States, changed the rules. game in terms of global competition for capital.

“I can’t stress enough that I believe we need to seize this opportunity and build the clean economy of the 21ste century,” she said.

“It’s a huge economic opportunity. »

Canada must invest in the transition in order to potentially have a significant share in the economy of the future, she said, or risk being left behind.

This year will be particularly important for attracting capital to Canada, she said, calling on provinces and territories to join in the effort.

“This is a truly historic economic moment, once in a generation, and it will take a Team Canada effort to seize it,” she said.

In the same breath, Freeland spoke about the need for some fiscal discipline in a time of economic uncertainty.

“We know that one of the most important things the federal government can do to help Canadians today is to keep in mind our responsibility not to add fuel to the fire of inflation” , she said.

Mme Freeland said these two major areas of spending, which were high on the agenda at Friday’s meeting, come at a time of a global economic downturn that is placing restrictions on government spending.

Prime Minister Justin Trudeau is due to meet with the premiers of the provinces and territories on February 7 to discuss a long-awaited agreement on health spending. The provinces are asking for billions more through the Canada health transfer.

According to Mme Freeland, it is clear that the federal government must invest in health care. She reiterated the government’s commitment to do so, but did not say whether she thought the amount the provinces are asking for in increased transfers for health was realistic.

“It’s time to see the numbers,” Quebec Finance Minister Eric Girard said Friday afternoon ahead of the Feb. 7 meeting.

The meeting of finance ministers comes at a tense time for many Canadian consumers, as inflation remains high and interest rates are much higher than they were a year ago.

Ministers also met with Bank of Canada Governor Tiff Macklem on Friday and discussed the economic outlook for Canada and the world, Freeland.

“We are very aware of the uncertainty in the global economy at this time,” said Minister Freeland. Inflation is high and interest rates are high. »

“Things are tough for many Canadians and many Canadian families today, and at the federal level, it’s a time of real fiscal restraint. »

The Bank of Canada raised its key interest rate again last week to 4.5%, but the central bank has signaled that it will now take a break to allow the impact of its tightening cycle dynamic to manifest.

The economy is showing signs of slowing, but annual inflation was still high at 6.3% in December. Food price inflation, in particular, remains high year over year.

Interest rates have forced a slowdown in the housing market, depressing prices and sales for months, even as the cost of renting rises in 2022.

Meanwhile, the labor market remained strong, and the unemployment rate approached a record low in December at 5.0%.

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