Remarks by the Deputy Prime Minister and Minister of Finance on the Canadian economy and the government’s priorities heading into the 2023 budget
From: Department of Finance Canada
March 20, 2023
Let me start by acknowledging that we are gathered on land covered under the Williams Treaties, and the traditional territories of the Mississaugas of Scugog Island First Nation.
And I am so glad to be here today with so many incredible members of the International Brotherhood of Electrical Workers—from here in Oshawa and across Ontario.
Over the past year, and before that too, I have spent a lot of time meeting with union workers and union leaders.
All across our great country—at union halls, on job sites, and at places like this—I am so impressed by the remarkable union workers, women and men, who build Canada every single day.
I am so impressed by the rightful pride you take in the skills you have, in the work you do, and in the people you work with.
Our economy depends on people like you—here in Oshawa, across Ontario, and right across our amazing country.
So before I begin, I just want to say: thank you all very much! I am really proud of you and I am proud to have spent some time with you.
I would like to start by speaking about the Canadian economy today.
First: the good news.
Canada has made a remarkable recovery from the COVID recession.
Last year, Canada delivered the strongest economic growth in the G7—stronger than the United States, stronger than the United Kingdom, stronger than Germany, Italy, France, or Japan.
And both the IMF and the OECD have predicted that Canada will see the strongest growth in the G7 over the course of this year.
Now, what does that actually mean? It means there are 830,000 more Canadians working today than before COVID first hit.
We have recovered 126 per cent of the jobs lost to COVID—compared to just 114 per cent in the United States.
When we announced a Canada-wide system of affordable early learning and child care in our 2021 budget, we said it would create new economic opportunities for mothers in Canada—and thus greater prosperity for all of us.
And last month, supported by that system of affordable early learning and child care, the labour force participation rate for Canadian women in their prime working years hit a record 85.7 per cent—compared to just 77.2 per cent in the United States.
Today, I met some amazing Canadian women who are training to be electricians and are about to go on their first placement. Early learning and child care is great for all parents and families, but we know it is especially meaningful for mothers. And I am so glad that system is in place and those fees are coming down. That is going to help some of the women here today, and it will help women across the country have a career and provide for their families.
In fact, child care is delivering such an economic boost to Canada, that our friends are following suit. Just last week, the United Kingdom announced a significant child care plan as part of their budget.
Our unemployment rate is near its record low, and today, there are more Canadians with good jobs than ever before.
These strong jobs numbers matter because a good job is the foundation for a good middle class life—it’s how we pay our bills, provide for our children, and build a future for our families, our communities, and our country.
This is a turbulent time in the world economy. So let me point out a second great Canadian strength.
We have strong institutions, and we have a financial system that has proven its strength time and again.
Our financial institutions have the capital they need to weather periods of turbulence.
A hallmark of Canadian banks is prudent risk management—and this is also a core principle for those of us who regulate the financial system.
Today, we are being vigilant—monitoring the situation closely, talking with our allies, and taking a Team Canada approach here at home. Canadians can and should be confident that at a time of global uncertainty, there is no better place to be than Canada.
So, that is the good news.
But I know that everyone here is also familiar with the not-so-good news.
Inflation has fallen in Canada for seven months in a row—and is on track to continue coming down. The Bank of Canada forecasts that inflation will fall to three per cent in the middle of this year, and 2.6 per cent by the end of the year.
But today, inflation, which was 5.9 per cent in January, is still too high. Canadians feel its pinch every day at the grocery store, and at the end of the month when it’s time to pay the rent.
To fight inflation around the world, central banks have raised interest rates in what has been the fastest and most synchronised monetary policy tightening since the 1980s.
This steep increase in interest rates is causing another kind of economic pain for many Canadians—many peoples’ mortgage payments are higher, and small businesses need to pay more for their lines of credit.
As I’ve travelled across the country over the past few weeks, doing our pre-budget consultations, I have met with Canadians who are doing well, and with Canadians who are really struggling.
But even in my conversations with the Canadians who tell me they are doing just fine, or even prospering, I have been struck by one common theme—and it has made me really proud to be Canadian.
When I’ve asked them how they’re doing, people who are doing well have said, “I’m fine, actually. I got a raise, and I have a fixed rate mortgage.” Or, “I’m great—business is booming, and my biggest problem is that we can’t find enough workers.”
But then, without fail, comes the next sentence: “I’m worried about some of my friends and neighbours. Their rent is going up, and their wages aren’t. They are struggling just to get by.”
That’s at the heart of what makes us Canadian. Even if we’re okay, we worry about our neighbours. We worry about our friends. We believe in taking care of each other.
Our government understands that, which is why, over the past seven years, we have worked energetically to strengthen our social safety net.
It is there today for the Canadians who need it the most—for our children, for our seniors, for our least well-paid.
Our enhanced social safety net includes an expanded Canada Workers Benefit for those who do essential jobs but don’t get paid very much.
It includes the Canada Child Benefit—and now, affordable early learning and child care—for parents raising their children, our country’s future.
It includes increased Old Age Security and Guaranteed Income Supplement benefits for our seniors.
Since December, it has included dental care for more than 200,000 children whose parents could not afford to take them to the dentist.
And, critically, all of our most important benefits are indexed to inflation.
This social safety net is there for everyone.
And in the weeks to come, for those Canadians who feel the bite of rising prices the most acutely—for our most vulnerable friends and neighbours—our government will deliver additional, targeted inflation relief.
This support will be narrowly focused and fiscally responsible.
The truth is, we cannot fully compensate every single Canadian for all of the effects of inflation or for elevated interest rates.
To do so would only make inflation worse and force rates higher, for longer. Canadians are smart—all of you here are smart—so I know you understand that.
What Canadians want right now is for inflation to come down and for interest rates to fall.
And that is one of our primary goals in this year’s budget: not pour fuel on the fire of inflation.
So, in our budget, we will exercise fiscal restraint.
Higher interest rates are having their intended impact—here in Canada and around the world.
The global economy has slowed down, and the Canadian economy has slowed down.
That means government revenues are lower. And this slow down comes after an extraordinary three years when the federal government provided eight out of every ten dollars to support Canadians and the Canadian economy during the pandemic. Our ability to spend is not infinite.
Canada has the lowest deficit and the lowest debt-to-GDP ratio in the G7, and a Triple-A credit rating.
Our country has a proud tradition of fiscal responsibility, and we are determined to maintain it.
Canada is, after all, a country of peace, order, and good government.
And today, more than ever, that is something to be proud of—and to rely on.
By exercising fiscal restraint, and by not pouring fuel on the fire of inflation today, we will ensure we can responsibly invest in Canadians and in the Canadian economy for years to come—just as we have done for these past seven years.
Because we know that investments in Canadians are also investments in our economy.
We are investing in housing because our economy is built by people, and people need homes in which to live.
To address the shortage of workers that so many of our communities and businesses are faced with, we are investing in ensuring Canadian workers have the skills they need, and that they can travel to where the jobs are.
We have welcomed record numbers of skilled workers to Canada, and we will welcome many more in the years to come.
We are making child care more affordable for families from coast-to-coast-to-coast, meaning more mothers no longer have to choose between their family and their career.
Investments in housing, in skills, in immigration, and in child care: these are not just social policies—they are economic policies, too.
And health care is another one of these policies.
So in our budget, we will deliver the comprehensive health care plan that the Prime Minister announced last month.
With an investment of $198 billion in public health care over the next ten years, we will ensure that Canadians can rely on a world-class, publicly funded health care system—one that is deserving of its place at the heart of what it means to be Canadian.
And we will ensure that a strong and effective public health care system can continue to care for and nurture a strong and healthy Canadian workforce. That is what Canadians deserve. That is what Canadian working people deserve.
Universal and high quality health care is—rightly—a priority for every single Canadian. It is also a national competitive advantage.
This is a significant investment—and a necessary one.
And it will be one of two significant and necessary investments that we will make in our budget.
We will invest in strengthening Canada’s universal public health care system. And we will invest in building Canada’s clean economy.
Because once we have wrestled inflation to the ground, Canada must navigate two fundamental shifts in the global economy.
First, in what is the most significant economic transformation since the Industrial Revolution, our friends and partners around the world—chief among them, the United States—are investing heavily to build clean economies and the net-zero industries of tomorrow.
At the same time, Putin and the pandemic have cruelly revealed to the world’s democracies the risks of economic reliance on dictatorships. As a result, our allies are moving quickly to friendshore their economies and build their critical supply chains through democracies like Canada’s.
Together, these two fundamental shifts represent a huge economic opportunity for all of us —for Canada and for Canadian workers like the great people here with me today.
From clean energy, to clean technology, to battery manufacturing, to electric vehicles, we can and we are becoming a global leader in the growing clean economy—because Canadian workers and Canadian businesses have the necessary expertise, and because Canada produces what the world needs.
From energy to critical minerals, Canadian workers can be the ones to provide our allies with the resources they need—and Canadian families and Canadian communities can reap the benefits.
Today, and in the years to come, Canada will either capitalize on this historic moment, on this historic opportunity before us, or we will be left behind as the world’s democracies build the clean economy of the 21st century.
To be left behind would mean less investment in our communities, and fewer jobs for an entire generation of Canadians.
That is why the plan we will release next Tuesday will include a serious investment in Canadians—in good jobs, in more vibrant communities, and in a new era of economic prosperity that we will build together.
We will build a Canadian economy that is more sustainable, more secure, and more affordable.
We can create hundreds of thousands of great, middle class jobs, great middle-class careers —in communities big and small—from coast-to-coast-to-coast.
And that is exactly what we will do.
These are great, satisfying, well-paid careers and our government is going to invest to be sure Canada has an abundance of them.
There are some, I know, who are advocating for a different, more reckless approach to government policy: for sweeping, unfunded tax cuts for the wealthy, for a dismantling of the guardrails that make Canada a reliable and desirable place to do business, and for cuts to the EI and the pensions that Canadians have been contributing to for their entire working lives.
Other countries have tried this reckless approach—and they have been brutally punished by the markets.
Our budget will be a serious plan at an important moment in the history of our country, and at a challenging time for the world’s economy
A responsible fiscal plan. Supporting Canadians. Strengthening public health care. And building and investing in Canada’s clean economy.
A clean economy that is good for working peoples, good for business, good for Indigenous communities, good for the environment, and which makes life more affordable for Canadians.
Where everyone can get the quality health care they need, and where everyone can roll up their sleeves and earn a good living with a good, middle class job.
Where everyone can share in the remarkable opportunities that Canada provides.
All of us have the incredible good fortune to live in the greatest country in the world.
And I have never been more excited about the future of our country than I am right now
Because Canada is filled with people who can do, who want to do, really big things. I’m here with a lot of them today.
And it’s because of the people like the ones here today—the welcoming, diverse, hard-working, smart and talented people who call our country home—that the 21st century will surely belong to Canada.