Morneau focuses on eking out tiny fractions of growth as Canadian economy turns sluggish<\/a><\/li>\n<\/ul>\nThe PBO has levelled sharp criticism against the government in recent months for failing to report detailed information on the program, which has been marred by delays since the outset. The program is one of the centrepieces of the Trudeau Liberals\u2019 plan to take on steep deficits in a bid to spur economic growth.<\/p>\n
Infrastructure Minister Amarjeet Sohi said infrastructure spending was \u201cdefinitely helping\u201d to grow the broader Canadian economy, despite widespread delays that led the government to extend the end dates for some projects. In its latest budget, Ottawa pushed back billions in spending to future years as investment dollars failed to get out the door.<\/p>\n
\u201cI\u2019d say that we\u2019re delivering as we thought we would,\u201d he said to reporters Thursday.<\/p>\n
Analysts think the government is unlikely to meet its spending goals, with many predicting investments will be extended beyond the 12-year timeline. The massive infrastructure spending program unveiled under former prime minister Stephen Harper in the wake of the economic recession met similar pitfalls.<\/p>\n
\u201cIt\u2019s not a shocking story \u2014 I think what\u2019s more surprising was government\u2019s own expectations rather than the outcomes,\u201d said Brian DePratto, the chief economist at TD Bank in Toronto.<\/p>\n
DePratto commended the government for releasing more details around the infrastructure program, which included the ticket prices of major projects and whether or not those projects have begun construction.<\/p>\n
However, he said there was still detail lacking for when projects were expected to be completed and the current status of those projects.<\/p>\n
\u201cIt doesn\u2019t really give a whole lot of colour,\u201d he said, adding that the lack of some details makes the program’s economic impact less clear.<\/p>\n
\u201cWithout that kind of information it\u2019s challenging to make that assessment,\u201d he said.<\/p>\n
Many economists and analysts have criticized the program more broadly for coming at the wrong time.<\/p>\n
The Bank of Canada on Wednesday decided to hold its key interest rate, but overall the economy is running close to its full capacity, potentially neutralizing any efforts by Ottawa to spur growth.<\/p>\n
\u201cI don\u2019t have an issue with stimulus spending per say, I just don\u2019t think we need any more. There\u2019s no need at this point to be adding to deficits,\u201d DePratto said. Ironically, prolonged infrastructure delays could actually translate into a better outcome for the overall Canadian economy, according to Andrew Grantham, an analyst with CIBC based in Toronto.<\/p>\n
\u201cWith the timing delays we\u2019re seeing now, (the spending) could be coming at a time when the economy is slowing down and is in need of stimulus,\u201d he said.<\/p>\n
However, analysts also say that infrastructure spending today could provide a much-needed boost to Canadian business investment, which has slackened amid economic uncertainty spread by U.S. President Donald Trump.<\/p>\n
The Bank of Canada estimated in its monetary update Wednesday that the threat of corporate tax reform and protectionist trade polies in the U.S. could reduce Canadian business investment by three per cent over the next three years.<\/p>\n
\u201cIt would be nice to have something that counterbalances that a little bit,\u201d Grantham said.<\/p>\n
Sohi also confirmed Thursday that the Canada Infrastructure Bank has not designated any specific projects to invest in. The bank was established under the Liberals to work with the private sector on major infrastructure developments that wouldn\u2019t otherwise get built, the government has said.<\/p>\n
\u201cI am very excited about the bank engaging private sector and institutional investors to build more infrastructure that our communities need,\u201d Sohi said.<\/p>\n
Ottawa has designated $15 billion of its $186-billion infrastructure budget to the Canada Infrastructure Bank, which will be complemented by another $20 billion from Canadian banking institutions.<\/p>\n
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