Scotiabank CEO Porter Says Canada Should Boost Stimulus Spendingby and
Energy East pipeline is good for `all Canadians,' Porter says
Negative interest rates are challenging for commercial banks
Canada’s economy needs a boost from the federal budget, especially in infrastructure projects such as the Energy East pipeline, Bank of Nova Scotia Chief Executive Officer Brian Porter said. The budget will likely be delivered in March.
“During this time of slower economic growth, we would encourage the government to boost the amount and timing of these investments.” Porter, 58, said Friday in the prepared text of a luncheon speech in Toronto. “One such project is the Energy East pipeline -- an entirely Canadian project that is good for all Canadians.”
Prime Minister Justin Trudeau and his Liberal Party won Canada’s federal election in October partly on the promise to bolster spending for infrastructure projects across the country. Economists estimate Canada will have a minimum deficit of C$20 billion ($14 billion) in the fiscal year starting April 1, according to a survey by Bloomberg News. That would include about C$10 billion in election promises and the impact of slower-than-forecast economic growth.
TransCanada Corp.’s C$15.7 billion Energy East project faces a potentially longer wait before it is approved by regulators after Trudeau’s government introduced an overhaul of the country’s review process in January.
Porter warned the move toward negative interest rates by central banks globally could fuel a downward spiral in economic growth as confidence erodes, consumers stop spending and businesses stop innovating.
“These policies, particularly negative rates, are challenging for commercial banks -- which act as an important shock absorber and help to stimulate and support economic growth,” Porter said. “This slowing growth only fuels investors’ anxiety and thus the cycle continues.”