Competitiveness to be key focus of fall fiscal update as Alberta oil concerns mount

Click to play video: 'Canada has capacity to handle a recession: Morneau'
Canada has capacity to handle a recession: Morneau
Finance Minister Bill Morneau tells Mercedes Stephenson that Canada's economy is doing well, the deficit has not increased compared to the U.S. and the government is looking at the tax changes made south of the border to address businesses' concerns in the fall fiscal update next month – Oct 28, 2018

The focus of the fall fiscal update will be on making the Canadian economy more competitive even as concerns mount about an oil price glut hurting Alberta.

Finance Minister Bill Morneau spoke with reporters from Toronto on Friday following a meeting with private-sector economists. He and the government have increasingly faced calls from critics in recent weeks to increase competitiveness to keep business from fleeing south to the United States.

READ MORE: Canada has the ‘capacity’ to handle a recession despite continued deficit, Morneau says

“What you’re going to see us talking about next week is how we can ensure we can continue to be successful in the face of challenges that we’re seeing,” he said at a Kiwanis Boys and Girls Club event.

“We’re seeing the economy right now doing well, but we recognize that we need to think about how we’re competitive tomorrow and the day after, so that we can create the kind of jobs we want for young people like the ones that are in this room.”

Story continues below advertisement

WATCH BELOW: Extended interview with Finance Minister Bill Morneau

Click to play video: 'Extended interview with Finance Minister Bill Morneau'
Extended interview with Finance Minister Bill Morneau

Morneau continued, adding, he has heard concerns across several economic areas.

“What I heard from the private-sector economists is both a sense that our economy is doing very well right now, but a concern that we think about how we respond to global challenges around trade, U.S. challenges around taxes, and think about the big challenge we have right now in Alberta with the oil-price differential.”

WATCH BELOW: Finance minister on the transformative nature of LNG investment

Click to play video: 'Finance minister on the transformative nature of LNG investment'
Finance minister on the transformative nature of LNG investment

Crude oil from Alberta hit a record-low price of $14 a barrel this week.

Story continues below advertisement

Light demand for oil is pushing prices down everywhere, but the benchmark price for American oil is about $50 a barrel higher.

Canadian producers are suffering because there’s more oil sitting around here than they can physically move to buyers.

Morneau also has been under pressure from business groups to cut Canadian corporate taxes to better compete with the United States, where President Donald Trump has done the same.

But the finance minister is widely expected to steer in a different direction next week, instead introducing measures to make write-downs on capital investments more generous.

When asked about the impact of low oil prices on the federal books, he pointed to the strong national economy but expressed some concern for Alberta.

Sponsored content