Federal Finance Minister Bill Morneau says worst of oil shock appears to be over

Canada's finance minister told a Calgary business crowd on Monday that the worst of the oil downturn appears to be over, but he understands anxieties remain.

"We think there's emerging evidence that the worst effects of the oil shock are fading," Bill Morneau said at the Calgary Chamber of Commerce event. "Employment in this province has increased by 20,000 since July 2016."

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Morneau noted there have been local and global challenges.

"We've seen a rise in populism around the world over the course of the past year and a half," he said.

"We've seen a change in people's attitudes to the opportunities that they see for themselves and their families in the next generation."

Taxes, investment and innovation

The finance minister was selling his latest budget, tabled last Thursday, although the details were sparse. His focus was on the Liberal government's investments in the middle class, including tax cuts, and the recent announcements of money for innovation.

The government hopes the initiatives will kick start the Canadian economy and help hard-hit areas like Alberta. 

"We want a future where our young Canadians are fluent in English, or French, or both, but also maybe in C++, where they feel as empowered as they need to be to seize the opportunities of a more innovative economy," he said, referencing a push to include coding in education.

'Big bets' on sectors of the economy

Morneau said the government has to build on Canada's successes by making "big bets on sectors of the economy that hold enormous potential for future growth."

He emphasized how important this is for Alberta, singling out the resource sector, but also focusing on advanced manufacturing, health, bio sciences, agriculture and clean energy.

"Places like Alberta, with their already enormous experience with energy innovation, are ideally placed to contribute to and benefit from this growth," he said.

Deficit and the U.S. question

When it comes to the ballooning deficit, Morneau made no apologies.

"We don't want to miss the opportunity to make investments at a time when it makes sense to make investments," he said, stressing the strength of the country's fiscal situation when compared to other G7 countries.

The recent budget has been called a wait-and-see document, particularly in light of the uncertainties tied to the Trump presidency.

Morneau said the government isn't side-stepping the issue and has been working hard to establish relationships in the U.S., and to drive home the importance of the trading relationship — whether with the new administration or going state-by-state.

"Our approach has been to be deeply engaged with the new administration from day one," he said.

Unanswered questions

Details on the government's plans to use $950 million over five years to create "superclusters" in order to attract international businesses in certain targeted sectors were minimal, other than to say they will double down in areas where that has happened organically and invest in creating new clusters where they see potential.

Another investment question mark is around the physical location of the federal government's new infrastructure bank, which would funnel tens of billions of dollars into projects and partnerships with investors.

He led into his answer with a bit of a tease.

"With respect to the location, I spoke with Mayor Nenshi today — he is a very strong advocate as everybody who lives in this city knows — and said that we haven't come to a conclusion."