Trudeau government’s economic forecast: “We may have some nasty surprises”

The economic update presented by the Trudeau government on Thursday contains some elements that could cause problems for years to come.

• Also Read: Economic update: Canada could enter recession next year

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Robert Asselin, vice-president, public policy at the Business Council of Canada, sees “two big problems with futures.”

“First, we are not expecting a recession. We necessarily expect growth in the next five years,” Mr. Asselin said in an interview on the show Le Bilan.

The average over the next five years will be even higher than what growth has seen in the past 20 years, which, according to the expert, is “absolutely unlikely”.

Also problematic is the interest rate that drives the Ottawa forecast.

“We expect interest rates to go down to 3%, which in my opinion, given the rise in inflation we’re currently experiencing, I don’t think is very likely,” explained Mr. Asselin.

A simple change in either of these two variables would shuffle the Trudeau government’s cards.

“If we change these two data points, we have to understand that in 2023 we have a great recession or a major recession or hyperinflation that lasts longer than we think, say 4% or 5% and the rates that the federal government has, refinancing its debt. Constantly, we have bad surprises. ,” supports the vice president.

Robert Asselin stresses caution with long-term indications.

“You have to be careful with long-term instructions. We keep adding expenses to every budget, even in the economic projections given to us today that are not expected in 3-4-5 years,” he said.

“Let’s take today’s forecast with a grain of salt,” adds the expert.

Watch the full interview in the video above.