Morneau defends budget, says Ottawa must play both short and long game

Finance Minister Bill Morneau is defending his latest federal budget against complaints that it doesn't do enough to shield Canada from shorter-term competitiveness threats linked to incoming U.S. tax reforms.

In a speech to the Economic Club of Canada, Morneau says Ottawa will focus on more immediate worries like NAFTA and lower U.S. corporate taxes at the same time it takes steps to address longer-term domestic risks, such as the aging workforce.

The fiscal plan tabled Tuesday in the House of Commons was packed with billions of dollars worth of new investments, including measures to increase the labour-force participation of women.

To pay for it all, the Liberal government used up roughly $20 billion of additional fiscal room over the coming years that came from economic improvements, reprofiled infrastructure commitments and lower-than-expected departmental spending.

Morneau says Canada needs to play both a long game and a short game _ and that the brightening economy enables the government to do just that.

In a news conference following his speech, Morneau reiterated that his department is still doing its homework on impending U.S. tax reforms that business leaders have warned could damage to the Canadian economy.