Finance Minister Chrystia Freeland plans to release an updated accounting of federal finances today and provide the government’s economic outlook for the coming months.
The government predicted the deficit for last fiscal year would be $354.2 billion, and nearly $155 billion this year.
But federal books could have billions more in extra fiscal space helped by higher oil prices, which have also helped push up inflation rates.
Freeland didn’t directly answer a question Monday about how that will be reflected in today’s update, saying she would have more to say once the document is released.
While the Liberals promised billions in new spending on the election campaign, the Finance Department has sent signals that the update won’t have a long list of new spending measures.
One measure was unveiled Monday, as the government set aside $40 billion to compensate First Nations children and undertake long-term reforms to the child-welfare system.
Economists suggest that some promised spending might be delayed because it could add to inflationary pressures.
While the Bank of Canada has a mandate to keep inflation in check, the government agreed Monday it plays a role in helping the central bank maintain inflation around its two-per-cent target.
BMO director of Canadian rates Benjamin Reitzes said the wording could be a sign that the government recognizes it is time to stand down a bit on its stimulus spending.
Freeland is facing calls for more benefit spending from labour groups, and requests from business groups for a plan to deal with supply-chain issues, “Buy American” provisions the White House is pushing and domestic labour shortages.
Dennis Darby, president of Canadian Manufacturers and Exporters, says the issues could weaken the economic rebound from COVID-19.
OTTAWA – Statistics Canada says the country’s merchandise trade deficit narrowed to $1.3 billion in September as imports fell more than exports.
The result compared with a revised deficit of $1.5 billion for August. The initial estimate for August released last month had shown a deficit of $1.1 billion.
Statistics Canada says the results for September came as total exports edged down 0.1 per cent to $63.9 billion.
Exports of metal and non-metallic mineral products fell 5.4 per cent as exports of unwrought gold, silver, and platinum group metals, and their alloys, decreased 15.4 per cent. Exports of energy products dropped 2.6 per cent as lower prices weighed on crude oil exports.
Meanwhile, imports for September fell 0.4 per cent to $65.1 billion as imports of metal and non-metallic mineral products dropped 12.7 per cent.
In volume terms, total exports rose 1.4 per cent in September while total imports were essentially unchanged in September.
This report by The Canadian Press was first published Nov. 5, 2024.
