Finance Minister Justin Trudeau will use a keynote speech to argue that the Government of Canada is prepared to address affordability issues as consumer prices rise and borrowing costs rise sharply.
Chrystia Freeland, in the noon statements at the Toronto Empire Club, will examine the state of Canada’s economy as the COVID-19 pandemic subsides, according to a person familiar with the speech. It will focus on the global challenge of inflation and the steps the government is taking to counter the rising cost of living.
However, it will not expose any new spending, but will target programs that are already within the fiscal framework, the person said.
Chrystia Freeland speaks in Hamilton, Ontario on April 8, 2022.
Freeland presented a budget in April with less spending than expected, using a revenue stream to reduce the deficit. She will stress that the government must show fiscal restraint after a huge emergency spending during the pandemic, the source said.
Outstanding programs are expected to increase the benefits of low-income workers in Canada, an increase in Old Age Security payments and a $ 30 billion child care program. ($ 23.3 billion) from the government that will reduce rates for the average. family for the next five years.
The government predicts a deficit of $ 52.8 billion this fiscal year, or 2% of gross domestic product, below a gap of about 15% at the peak of pandemic spending in 2020-2021.
Freeland’s speech comes at a difficult time for the economy. Next week’s inflation data is on track to show an annual rate of more than 7%, consolidating expectations that the Bank of Canada will follow the Federal Reserve with a large rate hike of 75 basis points in its next meeting in early July.
This would bring Canada’s political interest rate, which remained at an emergency pandemic low of 0.25 per cent until March, to 2.25 per cent, the highest it has been since late 2008. How does this sharp rise in borrowing costs affect heavily indebted households. a key concern for politicians and policymakers.
His remarks also come two weeks after his predecessor, Bill Morneau, told a Toronto dinner that the Liberal government is not focused enough on long-term growth challenges such as productivity. The former finance minister resigned in August 2020 after a rift broke out with Trudeau over the pandemic recovery plan.