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Headlines over the past month have rightfully focused on railway blockades, plane crashes and pandemics. There has been a lot of news and so it's understandable that some stories get overlooked.

I want to draw your attention to a story you may have missed but is worth your attention: the economy isn't doing that great.

Those events I mentioned — specifically the coronavirus outbreak and the railway blockades — have an economic impact in addition to the very significant affects they have on our health and on reconciliation respectively.

Parliament's budget watchdog, Yves Giroux, spelled it out clearly late last week, downgrading his outlook for the Canadian economy. The last quarter of 2019 ended up with almost flat growth at 0.3 per cent, and Giroux cut his projection for the first quarter of this year from 1.8 per cent to 1.5 per cent (which was the estimate back in November).

Freezing rain turns the Peace Tower white, Thursday January 24, 2019 in Ottawa. (Canadian Press/Adrian Wyld)

The slowdown last year, according to Giroux, is due to temporary disruptions in mining, oil and gas, motor vehicle and rail transportation sectors. Lax business investment was also a factor.

The reason for the lowered expectation this year is the coronavirus outbreak.

I promise I'm not going to be all doom and gloom. Wages have seen some growth, unemployment is still remarkably low in most provinces (not all) and the economy is growing (if very slowly) not contracting.

The federal finance minister's read on the situation?

"Generally, there's good reason for us to be optimistic about our situation and the economy," Bill Morneau said last week after meeting with private sector economists in Toronto. "There are though, as we know, always challenges ..."

Make no mistake — an economy with slow growth is a challenge; and maybe a bigger one than Morneau is willing to admit.

Finance Minister Bill Morneau says that despite some challenges "Generally, there’s good reason for us to be optimistic about our situation and the economy." (The Canadian Press/Nathan Denette)

First of all, less growth means less revenue for the government. As expenses ‒ for a variety of reasons, including spending promises made during the campaign ‒ go up, less revenue isn't a great thing (regardless of how this government does not appear bothered by the current deficit levels, they won't be happy).

But also — what the Parliamentary Budget Officer lays out may only be cracking the surface, for a few reasons. Giroux himself admits in his report that his estimate for how much the coronavirus outbreak might impact the economy is "highly uncertain." Early projections are based on modelling from SARS, which happened 17 years ago.

As Brian Kingston of the Business Council of Canada put it: "in 2003 China was responsible for about four per cent of global GDP, they're now responsible for nearly 20 per cent … so it's a completely different ballgame."

It's worth noting that though exports to China fell last year because of the very strained relationship between that country and ours, China is still the second biggest destination for Canadian exports after the United States. A slowdown in the Chinese economy will impact Canadian exporters, that's a certainty.

And there's more. The PBO's analysis was done before the rail shutdowns started last week. There's no firm estimate I could find quantifying the economic impact of the shutdowns, but as of Friday, grain farmers said they'd already lost $10 million. Remember, when Giroux forecasted slower economic growth this year, he wasn't even taking that into account.

It will be interesting to see how the government navigates this set of economic circumstances. It's not straightforward — there's no major alarm bell; there's less growth but more jobs.

My guess is that means Morneau and his colleagues will say more of the same thing — things are good but there are challenges. Just like my love for chocolate and my desire to lose weight, they'll continue to straddle the fine line between retraction and growth.

And remember — the budget is coming up, likely at the end of March. The Liberal government will have a better idea of how much of a hit the economy is taking by then — and its decisions in crafting the budget will have to reflect that.

Vassy Kapelos is host of Power & Politics, weekdays at 5 p.m. ET on CBC News Network.

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