Published On: Tue, May 14th, 2019

Justin Trudeau Canada latest news: Economy ‘mistake’ could lead to general election issues | World | News


The Canadian prime minister had led the country to around three percent growth in 2017, the highest in the G7. But now a number of experts have said his decision to concentrate on helping the middle classes and those striving to join it would stop economic growth. David Rosenberg, chief economist & strategist at Gluskin Sheff + Associates Inc said: “The first move to play Robin Hood by raising top marginal income tax rates in the personal sector was a huge mistake.

“This is a government that got elected on social policies as opposed to economic growth policies.”

In 2016, Mr Trudeau made a tax cut that was aimed at the middle classes.

That began a major increase in child benefits for families.

At the same time, Mr Trudeau raised levies on the wealthiest one percent of Canada’s citizens.

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Three years later and with his Liberal Party languishing behind Conservative Party rival Andrew Scheer in opinion polls, the outlook for growth has darkened.

His government was forced to defend its policy.

Pierre-Olivier Herbert, a spokesman for Finance Minister Bill Morneau, said: “Middle-class Canadians can see first hand that our plan is working.

“The Conservatives still have no plan for the economy.”

Some economists believe a better policy mix would put more focus on the kind of tax cuts which stimulate investment.

Investment tends to boost productivity, which could raise wages and the economy’s capacity to grow.

Stephen Brown, senior Canada economist at Capital Economics, said: “Potential growth is no higher, that’s the issue.

“The balance of the stimulus could have been tilted toward more private investment.”



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Justin Trudeau Canada latest news: Economy ‘mistake’ could lead to general election issues | World | News