World Economy

Trudeau Says Growth Vital Than Large Budget Deficit

Trudeau Says Growth Vital Than Large Budget Deficit  Trudeau Says Growth Vital Than Large Budget Deficit

Canadian Prime Minister Justin Trudeau suggested on Thursday that a C$30 billion ($23 billion) budget deficit was not a hard limit as the government’s focus should be on spurring economic growth.

In a wide-ranging interview, Trudeau, 44, said he was not obsessed with a “perfect number” for the budget deficit and instead vowed to find the right path to economic growth, saying that was more important than a specific deficit target, CNBC reported.

“Yes, we need to be fiscally disciplined, we need to be responsible, but we need to be investing in the right kinds of things at the same time, so the arbitrary picking a number and trying to stick with it is exactly what I campaigned against in the last campaign,” Trudeau said.

“It’s not an obsession with the perfect number, it’s an obsession with the perfect, or the right, path to grow the economy in ways that help in the short term but lead us on the path towards prosperity in the medium and long term.”

Canada’s economic growth has been tepid and massive wildfires that have spread across the country’s energy heartland will cost the government in terms of aid money and in tax revenues lost in oil production cuts. Trudeau campaigned on a proposed C$10 billion annual deficit but Ottawa later said the economy needed a bigger jump start given the downturn.

“What Trudeau learned from ballooning out the deficit the first time was that voters don’t care. Canadian voters are prioritizing growth and Trudeau plans to deliver that at any cost,” said Adam Button, currency analyst at ForexLive in Montreal.

“Like voters, the market is much more concerned with growth at this point. Central bankers have failed to deliver growth and markets are willing to tolerate larger government deficits for a chance to return to the old normal.”

Sitting at his desk in his corner office on Parliament Hill, Trudeau said he did not see a point at which the government would walk away from talks with Bombardier Inc because aerospace jobs were exactly the kind of future Canada wants.

Ottawa is under pressure to provide aid to the plane maker, which is based in the mostly French-speaking province of Quebec, Trudeau’s home, but federal negotiators want concessions around control of the company.