OTTAWA -- Prime Minister Justin Trudeau described Canada’s current economic situation as a recession on Friday, and that should come as no surprise, says Finance Minister Bill Morneau, as the latest economic figures show two consecutive months of major job losses.
"I think we all recognize that the depth of the economic challenge is significant, that it's quite straightforward that we are in a recessionary time," Morneau said in an interview on CTV’s Power Play.
"There will be continuing challenges as a result of COVID-19 that we'll need to face up to," he said.
Though, the finance minister said now is not the time to think about raising taxes or other ways Canada will get out of the massive debt that this current economic downturn and the aid measures meant to mitigate it are causing.
"Now is really not the time for me to opine on what the nature of the approach will be on facing those challenges because I can't tell you that we can fully understand either the depth or the duration of the issue that we're facing. That will drive what the eventual conclusions are afterwards," said Morneau. "So, best we can do right now is support people, support businesses so that we come out stronger, and then that strength will be the advantage that we have in facing up to those next set of decisions."
During his address to the nation on Friday, Trudeau said that “this is one of the first recessions we’ve ever seen that has so hard hit vulnerable workers.” He also spoke to how the last two months of jobs numbers indicate that women, new Canadians and young people are being particularly impacted. Trudeau said the federal government will have to think about those groups and how to better support them after the crisis.
On Friday, Statistics Canada data showed that since March the Canadian economy has lost about three million jobs.
A week ago, C.D. Howe Institute's Business Cycle Council said that Canada has entered a recession, based on its methodology and the data available.
Generally speaking, an economy is considered to be in a recession when there are consecutive quarters of negative economic growth.
"We’re in extremely challenging times," Morneau said, describing it as a situation beyond what many could have imagined. He said the government continues to look at further COVID-19 aid program extensions, but it’s undeniable that not all businesses will make it through the pandemic. He said the government’s goal is to help "as many as possible" come out the other side.
"We hope Canada will come out better than other countries, because of the scale and the speed of the investments we've made," Morneau said.
A more fulsome economic picture of Canada’s GDP and income and expenditures for the first quarter of 2020 will be released on May 29, though neither Trudeau nor Morneau have offered a timeline on when a federal economic update or budget will be released.
"A budget typically is an expression of what people can expect in the coming year, both in terms of how the economy is going to unfold, what sort of measures are going to be brought in. And in normal times, it’s usually pretty accurate. Right now, we’re in a situation where there is a tremendous degree of uncertainty as to what the economy could look like six months from now, what the economy could look like three months from now. What’s going to happen in the coming weeks," Trudeau said earlier this week.
