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Morneu's question of government expenditure depletion rises, forecasts on deficit forecasts


Minister of Finance Bill Morne will address journalists in Ottawa (Otto) on Thursday, November 22, 2018.

Sean Kilpatrick / Canadian Press

The fall economic upheaval this week suggests that Ottawa will not spend billions of dollars in operating expenses, which doubts the economists who question the economy.

While conservatives attacked liberals this week, the details of the government's fiscal plan indicate that federal departments and agencies' expenditures for staff and other major costs are expected to decline as the interest rates rise.

As it is expected, the federal operating expenses this year will amount to 100.3 billion US dollars. From 201 to 2019 – $ 96 billion. To $ 95 billion – 2020 election year Decrease to $.

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It is expected that in the next five years it will increase from $ 320.2 billion to $ 370.8 billion. However, liberalism is expecting the economy to grow, thus reducing its expenditure by 2023-24, down from 14.4% to 13.8% in 2018-199, which is the percentage of gross domestic product.

Randall Bartlett, a senior economist at the University of Ottawa University of Fiscal Studies and Democracy, was unable to explain how the government could cut down the planned costs.

"In my opinion, it's hard to believe," he says. "It reduces the forecast of operating costs, and they are very optimistic and fill in revenue forecast, and so they provide the whole room. We think that's going to be a big deal."

An institute led by Former Parliamentary Budget Officer Kevin Beth analyzes departmental expenditure reports to assess federal funding. The Finance Department or current Parliamentary Budget Officer, Yves Gireaus, predicts a lot of flaws.

As reported on Wednesday, the federal deficit is estimated at 18.1 billion in 2018-19. Dollar, 2019-20 19.6 billion And $ 18.1 billion in 2020-21.

Updates did not occur when the deficit was eliminated.

In the updated section, the government lets you save on operating costs because interest rates are high in the long term, reducing employee benefits.

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Representative of the Finance Department, Jack Augri, said that changes in expectations of interest rates could have a major impact on government staff costs.

"Since estimated annual interest rates are projected to increase from the forecast horizons, the estimated value of this liability is reduced, which is seen as a reduction in operating costs. Given the fact that these conditional pension obligations are large, this effect is significant, "he said.

On November 21, the government announced a total of 14.4 billion tenge in six fiscal years. Announced new tax incentives for business in the amount of up to USD. Tax breaks allow Canadian companies to quickly calculate costs when investing in equipment, and this year is similar to those in the United States.

New tax challenges are due to the lowering of US business attraction to Canada's business investment.

The United States has also reduced corporate and individual tax rates, but Mr Morine said it is not responsible for the US tax payments this week.

"We believe that we have adopted a proper and balanced approach that allows us to be financially responsible at the same time," Morneu told reporters on Thursday.

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In the announcement of post-February budget for Ottawa, it was upgraded to $ 15.4 billion in six years.

Chief Economist Craig Alexander, along with Deloitte Canada, said the government would say that high interest rates would lower the long-term employee benefits. Nevertheless, Mr. Alexander could not comment on the correctness of the assumptions about operational costs, as he made departmental reports as Mr. Bartlett.

Mr Alexander said Wednesday's forecasts that the federal liberals would not spend much of the pre-election budget expenditure in 2019, especially when the economy was running out of expectations.

"The Government's expectation is that revenue growth will be much stronger than anticipated, costs will not be too high, and as a result, spring will be a fiscal room for new announcements in the spring," he said. "But if the economy slows down, I think they will be forced to maneuver the fiscal office with a bigger deficit."

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