\u0027High levels of fiscal spending will necessitate an unnecessarily large crowding out of private spending\u0027
Consumer price data for May are expected to show annual gains in excess of seven per cent — the highest in nearly 40 years. In her speech last week, Freeland said inflation “is a global phenomenon — one driven by factors that no single country is responsible for.”Article content
Like other governments around the world, Trudeau’s administration spent big when COVID-19 shut down large parts of the economy: Program spending briefly rose to almost 30 per cent of gross domestic product. In the April budget, Freeland’s department forecast expenses that remain elevated near 16 per cent of GDP over the next year, higher than the historical average before the pandemic.
Perrault and Lalonde argue that if the government were to pull back on spending, it would allow the Bank of Canada “to end its tightening cycle with a policy rate of 2.25 per cent.” With inflation still climbing, Macklem and his officials are expected to follow the Federal Reserve and deliver a 75-basis-point hike to borrowing costs on July 13. That would bring the benchmark overnight rate to 2.25 per cent, up from the emergency low of 0.25 per cent it was holding at until March.
Action in the overnight swaps market suggests traders see Canada’s central bank rate at 3.75 per cent by this time next year.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
High inflation expectations raise stakes for Bank of Canada ahead of CPI dataThe risk of inflation becoming entrenched in Canada's economy is growing, say analysts, as surging prices for gas and other highly visible consumer items undercut efforts by the Bank of Canada to keep expectations for price increases in check.
Read more »
Expectations high as Canada prepares to reveal plan for aging North American defencesExpectations are high as Defence Minister Anita Anand prepares to unveil the federal government's plans to upgrade North America's aging defences, whose importance has only grown in the aftermath of Russia's invasion of Ukraine.
Read more »
Canada requires first nine fully operational F-35 jets no later than 2027The Liberal government plans to purchase 88 F\u002D35s as part of a project expected to cost taxpayers between $15 billion and $19 billion.
Read more »
The final countdown to banning some single-use plastics in Canada begins today | National NewswatchNational Newswatch: Canada's most comprehensive site for political news and views. Make it a daily habit.
Read more »
Final countdown to banning some single-use plastics in Canada beginsCanadians will need to find alternatives for plastic straws and grocery bags by the end of the year as the federal government puts the final motions in place to ban some single-use plastics. Environment Minister Steven Guilbeault and a number of other ministers and Liberal MPs will lay out the plastics ban in a series of events across the country today.
Read more »