Canada’s weakening currency will probably face further pressure from persistently low commodity prices that also complicate the country’s fiscal situation, the nation’s finance minister said on Monday.
“Commodity prices are softening, affecting our terms of trade and making important inputs – so vital for our manufacturing sector – more expensive,” Bill Morneau said in his first public speech since being named to head the finance portfolio after the Liberal government’s election victory in October.
Morneau said he was encouraged by a recent uptick in the U.S. economy, but China and Europe were causes for concern.
“Going forward, it is very likely that global economic conditions will remain unfavorable and that subdued commodity prices will persist,” he said. “This of course has important implications for the currency and our fiscal situation.”
The Liberals campaigned on a platform to run budget deficits of up to C$10 billion ($7.3 billion) a year in order to spend on infrastructure to boost growth after the economy fell into a modest recession in the first half of the year.
