Ministerial retreat | Federal ministers to focus on economy and affordability

(Ottawa) One of the federal government’s priorities for the coming year is to attract new international grocers to Canada in order to increase competition and lower prices, Industry Minister François said on Sunday. -Philippe Champagne, as a cabinet retreat was about to begin in Montreal.




The entire federal cabinet is in town for a three-day retreat before Parliament returns on January 29, and the next federal budget is expected later this winter.

While cost-of-living issues remain top of mind for Canadians and polls indicate voters are increasingly unhappy with the federal Liberals’ failure to provide real relief from rising prices, Ministers are trying to use this meeting to define policies that could help.

Food prices are among the main problems, with food inflation in December still close to 5%, well above headline inflation which was pegged at 3.4% last month.

Minister Champagne said stabilizing food prices will depend in part on the introduction of greater competition, with just five companies accounting for more than 80 per cent of Canada’s food industry.

“If last year it was all about batteries, this year it’s about competition,” he said, referring to a series of massive announcements of new battery factories for electric vehicles in 2023.

Mr. Champagne said he is in talks with foreign grocers, who are more interested now that Canada has made some changes to its competition laws. Last year’s adjustments include, he said, greater ability to limit restrictions on leases that can prevent competition near existing grocery stores.

The Liberals are falling far behind the Conservatives in the polls. The last cabinet meeting, in August, was also billed as an attempt to focus government-wide attention on affordability and housing. Measures were taken in the fall, including the removal of the GST on new rental housing construction projects as well as the updating of the Competition law.

But they have failed to slow the Liberals’ slide in the polls, which Treasury Board President Anita Anand said is not a concern for the government.

“The premise of your question suggests that we are here to respond to poll numbers, and that is not the case,” Ms.me Anand.

“What we came to do is fight every day for Canadians’ needs during times of high inflation and high interest rates. That’s why we’re here with the Canada Child Benefit. That’s why we’re here to offer $10 a day child care. That’s why we’re here with affordable housing. »

Officials in Prime Minister Justin Trudeau’s office said last week that cabinet members would discuss how various programs, such as those listed by Ms.me Anand, are currently operating to help Canadians.

Housing and the economy at the heart of the discussions

Ministers will hear from several panels of experts on the economy and housing on Monday, and on relations between the United States and Canada on Tuesday. It comes as Canada’s largest trading partner enters a presidential election year, which could see Donald Trump return to the White House.

The ministerial retreat comes as economists warn of the possibility of at least a mild recession in Canada in 2024, increasing pressure on the government and potentially spelling more pessimism for Canadians.

Experts will include Frances Donald, chief economist at Manulife Investment Management, who said the economy is entering the new year on shaky footing. Manulife expects the slowdown to continue during the first half, but anticipates “an economic rebound starting in the second half.”

Canadians have already started to cut their spending and are worried about job security, Manulife warned. Many of them will also have to renew their mortgage loan at a rate two to three times higher than the previous one.

Dominique Lapointe, Manulife’s global macro strategist who wrote the forecast, said many economic realities in 2024 will depend on how the Bank of Canada manages interest rates.

The central bank’s aggressive interest rate hikes to counter inflation peaked in July at 5% and have not been changed since. Economists predicted the bank would begin cutting that rate in the spring, but the inflation figures have prompted some to hedge that bet now.

The first chance to see what the bank will do will be Wednesday, the day after the cabinet retreat ends.

Housing is another key topic of discussion, along with immigration and how the two are increasingly linked.

Mike Moffatt, an economics professor and housing expert at the University of Western Ontario, said that as Canada’s population continues to grow – almost entirely due to immigration – the supply of housing takes even more pressure. delay.

The Canada Mortgage and Housing Corporation said last year that Canada was short about 3.5 million housing units, and Moffatt noted that number was “probably even higher” now.

Immigration and its impact on housing will play an important role in the discussions in Montreal. The government has already raised the possibility of linking student visa approvals to available accommodation, and is under pressure to extend this to more immigration approvals too.

Canada currently aims to welcome 485,000 new arrivals this year.


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