Don’t expect much from today’s budget: Rising interest rates, debt leave little wiggle room

Finance Minister Bill Morneau releases a finance plan Tuesday around 4 p.m. in Ottawa that is expected to hold off from major new funding initiatives and deal largely with gender policy, such as boosting women’s workforce participation rates.Justin Tang/The Canadian Press files

Justin Trudeau, pinched for new cash and facing calls from businesses to tackle Canada’s deteriorating competitiveness, is turning his focus to lower-cost political priorities such as gender equality and science in his government’s third budget.

Trudeau’s finance chief Bill Morneau releases a finance plan Tuesday around 4 p.m. in Ottawa that is expected to hold off from major new funding initiatives and deal largely with gender policy, such as boosting women’s workforce participation rates. Morneau has signed he’ll keep to a plan of slow deficit reduction while lowering the ratio of federal debt to gross domestic product.

The plan comes amid calls to cut corporate taxes as businesses worry about the risks posed by U.S. President Donald Trump’s policies, at a time when the country’s growth is slowing, pinched by the uncertainty associated with ongoing NAFTA talks and a wider discount for Alberta oil. Canada is losing a competitive edge, partly due to U.S. tax reform and the threat Trump could withdraw from the North American Free Trade Agreement, business groups warn. Morneau is under pressure to act, but all signs are that he’ll wait.

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