Freeland touts opportunities of U.S. Inflation Reduction Act

Chrystia Freeland said the Act has created an economic opportunity that Canada needs to seize in order to have an outsized share of the clean economy of the century

The two big spending pressures on the federal government right now are health care and the global transition to a clean economy, Deputy Prime Minister and Finance Minister Chrystia Freeland said Friday.

After hosting an in-person meeting with the provincial and territorial finance ministers, Freeland said U.S. President Joe Biden’s Inflation Reduction Act, which includes electric-vehicle incentives that favour manufacturers in Canada and Mexico as well as the U.S., has changed the playing field when it comes to the global competition for capital.

“I cannot emphasize too strongly how much I believe that we need to seize the moment and build the clean economy of the 21st century,” Freeland said during a news conference.

“This is a huge economic opportunity.”

Canada needs to invest in the transition in order to potentially have an outsized share in the economy of the future, she said, or it risks being left behind. This year in particular will be an important year for attracting capital to Canada, she said, calling for the provinces and territories to chip in.

“This is a truly historic, once-in-ageneration economic moment and it will take a team Canada effort to seize it.”

At the same time, Freeland spoke of the need for fiscal restraint amid economic uncertainty.

“We know that one of the most important things the federal government can do to help Canadians today is to be mindful of our responsibility not to pour fuel on the fire of inflation,” she said.

Freeland said these two major spending pressures, which were among the topics prioritized at Friday’s meeting, come at a time of a global economic slowdown which poses restraint on government spending.

Prime Minister Justin Trudeau is set to meet with the premiers Tuesday to discuss a long-awaited deal on health-care spending. The provinces have been asking for increases to the health transfer to the tune of billions of dollars.

Freeland said it’s clear that the federal government needs to invest in health care and reiterated the government’s commitment to doing so but would not say whether she thinks the amount the provinces are asking for in increased health transfers is feasible.