Ottawa has indicated it remains more committed to delivering new social programs than repairing fiscal damage
In the lead-up to the release, Prime Minister Justin Trudeau’s government has indicated it remains more committed to delivering new social programs than repairing fiscal damage from the pandemic or cooling an overheated economy.
That will contrast sharply with next week’s Bank of Canada decision, when officials are expected to make the first 50-basis-point hike to the policy interest rate since 2000 as they work to bring consumer price gains down from a three-decade-high. “The budget is likely to add more conviction to our outlook that monetary policy will need to shoulder the brunt of reining in inflation,” Rebekah Young, Scotiabank’s head of fiscal economics, said in a report to investors.
It’s possible, however, the government shows more restraint by rolling out new programs slowly or financing new measures with money reallocated from other programs.Article content
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