OTTAWA – Finance Minister Joe Oliver will huddle with private-sector economists early next month to prepare for his pre-election budget — a blueprint set for release as the oil slump forces experts to downgrade economic forecasts.
Sliding crude prices have meant poor economic data for January, prompting economists to lower their first-quarter projections.
Oliver will meet with economists April 9 in Ottawa to hear their views on the of health of the economy and to prepare an average forecast for fiscal planning ahead of the spring budget.
The turbulence created by falling oil prices forced Oliver to take the rare step of postponing the budget, which is typically presented in February, until at least April. The Finance Department, he said, needed time to gauge the economic impacts of lower crude prices.
The delay means the early economic consequences of cheaper crude will have infiltrated the data before the budget is tabled.
Troubling signs have already started to surface in the numbers.
In a Financial Times interview published Monday, Bank of Canada governor Stephen Poloz warned the oil-price shock will make the economy’s first-quarter numbers look “atrocious.” Last week, Poloz expressed concern about the second quarter: “We’ve got our fingers crossed.”
The country’s banks are also predicting early-2015 growth will be a disappointment.
CIBC lowered its predictions following January’s weak numbers for wholesale trade, retail trade and manufacturing, chief economist Avery Shenfeld said Monday.
“In general, the most-recent news has not been healthy,” Shenfeld said.
At one point, the bank had projected annualized first-quarter growth of 1.5 per cent, but Shenfeld said CIBC has since lowered its prediction for real gross domestic product to 0.8 per cent. For all of 2015, the bank also dropped its expectations to 1.7 per cent from 1.9 per cent, he added.
More tweaks could be on the way Tuesday when Statistics Canada releases its GDP numbers for January, which CIBC predicts will show a decline of 0.2 per cent from a month earlier. Anything far off that mark — higher or lower — could lead to more fine tuning by CIBC, Shenfeld said.
The Conservative government’s opponents have frequently used the fallout of low oil prices as openings for their political attacks.
On Monday, Oliver found himself defending the government’s economic record during Question Period. Opposition MPs criticized the Conservatives for doing too little to create jobs and for putting off the budget.
The finance minister replied by saying the country was on the right track and reiterated the government’s long-held pledge to balance the books in 2015-16.
But Oliver once again stopped short of providing specifics on when the spring budget will be unveiled.
“Pay attention because the date is approaching,” Oliver said in the House of Commons after being asked about the timing of the budget.
Last year, then-finance minister Jim Flaherty met with private-sector economists on Jan. 27, about two weeks before he tabled the budget.
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