US & Canada

Trudeau seeks increased spending to boost Canadian economy

Justin Trudeau and Bill Morneau Image copyright AP
Image caption Prime Minister Justin Trudeau (right) and Finance Minister Bill Morneau delivered the federal budget to the House of Commons

Canadian Prime Minster Justin Trudeau's Liberal government has delivered its first budget, hoping to spur the fragile economy with more spending.

The deficit will hit C$29.4bn (£16bn) by 2017 and balancing the books could take at least five years, the government projects.

The budget called is a departure from former the Conservative government's austerity policies.

Dropping oil prices and currency values have contributed to a weakened economy.

"This budget puts people first and delivers the help Canadians need right now," Finance Minister Bill Morneau said, addressing the House of Commons. "It is an essential step in a sustained and strategic effort to restore prosperity and optimism."

The government aims to spur growth by 0.5% in 2016-17 and by 1.0% the next fiscal year.

Mr Morneau said the government will invest in green technology projects and offer tax breaks for energy efficiency.

"Some believe we must choose between a strong economy and a clean environment. They are simply wrong," he said.

Also notable in the budget is C$8.4bn allocated over five years for the country's aboriginal population, with nearly half the money to be spent on education. The allocation is a significant increase from the Conservative budget under former Prime Minister Stephen Harper.

Image copyright Reuters
Image caption "This budget puts people first and delivers the help Canadians need right now," Mr Morneau said

Mr Trudeau promised during his campaign to improve relations with Canada's indigenous peoples.

The government also announced funding to sponsor 10,000 more Syrian refugees, with C$245 million (£132 million) over five years. The government hit its goal of resettling 25,000 Syrian refugees by the end of February.

"The world saw the best of Canada in our response to this crisis," Mr Morneau said.

New Democrat Party leader Tom Mulcair said the Liberal budget does not do enough for indigenous children and that "promises are not being kept".

"Families across Canada are worried about their jobs and struggling to make ends meet - but today's budget told them they would have to wait longer for help," said Mr Mulcair in a statement. "The government missed an opportunity today to really deliver change."

Conservative opposition leader Rona Ambrose said the budget is a "nightmare scenario for taxpayers who will be forced to pick up the tab for today's Liberal spending spree".

Related Topics