Jason Kenney says the government may have to extend an operating spending freeze in order to balance its upcoming budget.
Speaking on CTV’s Question Period on Sunday, the minister of employment and social development said the government will not reduce services, but may have to control federal operating costs as low oil prices continue to cast uncertainty on the Canadian economy.
“We’ll have to certainly look at potentially further spending restraint,” said Kenney, who is also the chair of Cabinet Committee on Operations.
The minister’s comments come days after Finance Minister Joe Oliver said he will not deliver the budget until April, at the earliest. Federal budgets are usually unveiled at the end of February or in March, but Oliver said Thursday that this year’s announcement will be delayed to allow more time to monitor oil prices.
West Texas Intermediate oil was selling below $50 a barrel on Friday, dramatically lower than this past summer, when prices rose above $100 per barrel.
While Alberta’s budget will be hit the hardest, Kenney said the low prices will most likely be a “net negative” for the entire Canadian economy, and that the federal budget will feel the loss of corporate income tax revenue.
Despite this, he told CTV’s Robert Fife that the government has not hit the panic button on the budget. Kenney also said that recent retail losses, including Target’s decision to close its 133 Canadian stores, are not the result of low oil prices causing other economic issues.
“I wouldn’t conflate that with the change in oil prices. Target hasn’t made a dollar since they came to Canada two years ago.” he said. “There’s always some give and take in that very competitive industry.”
The president of Unifor, Canada’s largest private-sector union, says Kenney is wrong.
“When they say that this isn’t the sign for bad times, they’re wrong,” Jerry Dias told Fife. “We are an economy that is heading in the wrong direction”
Dias said he is concerned by recent job cuts and that part-time jobs are inflating job numbers.
Opposition leader Thomas Mulcair is also critical of the country’s financial situation. He blames Conservative tax cuts and the government’s reliance on natural resources for the current uncertainty.
“Mr. Oliver has had to push back the date for his budget, not out of any prudence or good management, simply because they’re panicking,” Mulcair told CTV’s Question Period.
If he were in power, Mulcair said, his strategy would be to raise corporate taxes to avoid economic deficit.
But Kenney said the government has no plans to axe the family tax cuts it announced earlier this year. The cuts are projected to cost $4.6 billion in 2015-2016, but he believes the breaks can act as an economic stimulus, providing Canadian families with more spending money to inject into the country’s economy.
