New Canadian Finance Minister Says Spending Plan Took Low Oil into Account

Canada needs to keep a close eye on low oil prices, which the ruling Liberal Party took into consideration when drawing up an election platform that called for extra stimulus, new Finance Minister Bill Morneau said on Saturday.

Morneau, speaking to reporters on the sidelines of a Group of 20 summit, also said U.S. Treasury Secretary Jack Lew was encouraged by the Liberals’ plans for new infrastructure spending.

The Liberals won the Oct. 19 election, in part on a promise to run three years of budget deficits to boost the economy.

Canada is a major exporter of crude and has been hard hit by slumping oil prices, which are now barely half what they were in the middle of 2014.

“Obviously we need to pay close attention to the price of oil, the price of commodities in Canada, it’s a critical issue for our economy,” said Morneau.

“But we did build our platform against a concern that we have slow growth in Canada and … one of the reasons for that slow growth is the price of oil,” he added.

Morneau also said he had recently spoken to Lew, who he cited as being “very encouraged” by the new Canadian government’s infrastructure spending plan.

Earlier this week Morneau said he would present a fiscal update to reveal the state of the nation’s books.

Asked on Saturday when the update would be unveiled, he replied “in the near term”, but gave no details.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza