Friday, June 2, 2023
No Result
View All Result
  • Media
Support Us
Macdonald-Laurier Institute
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy Program
      • Energy
      • Environment
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • The Great Energy Crisis
    • Centre for Advancing Canada’s Interests Abroad
    • Dragon at the Door
    • Canada and the Indo-Pacific Initiative
    • The Transatlantic Program
    • DisInfoWatch.org
    • An Intellectual Property Strategy for Canada
    • Competition Policy in Canada
    • Speak for Ourselves
    • Justice Report Card
    • COVID Misery Index
      • Provincial COVID Misery Index
      • Beyond Lockdown
      • COVID and after: A mandate for recovery
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Past Projects
      • The Eavesdropping Dragon: Huawei
      • Talkin’ in the Free World with Mariam Memarsadeghi
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
      • Straight Talk
      • Labour Market Report
      • Leading Economic Indicator
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy Magazine
      • Inside Policy Online
      • Inside Policy Back Issues
    • Papers
    • Commentary
    • Columns
    • Books
    • Video
    • Podcasts
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy Program
      • Energy
      • Environment
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • The Great Energy Crisis
    • Centre for Advancing Canada’s Interests Abroad
    • Dragon at the Door
    • Canada and the Indo-Pacific Initiative
    • The Transatlantic Program
    • DisInfoWatch.org
    • An Intellectual Property Strategy for Canada
    • Competition Policy in Canada
    • Speak for Ourselves
    • Justice Report Card
    • COVID Misery Index
      • Provincial COVID Misery Index
      • Beyond Lockdown
      • COVID and after: A mandate for recovery
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Past Projects
      • The Eavesdropping Dragon: Huawei
      • Talkin’ in the Free World with Mariam Memarsadeghi
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
      • Straight Talk
      • Labour Market Report
      • Leading Economic Indicator
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy Magazine
      • Inside Policy Online
      • Inside Policy Back Issues
    • Papers
    • Commentary
    • Columns
    • Books
    • Video
    • Podcasts
No Result
View All Result
Macdonald-Laurier Institute

The budget undermines the inflation fight: Philip Cross in the Financial Post

Ongoing fiscal stimulus risks keeping interest rates higher for longer.

April 13, 2023
in Columns, Domestic Policy Program, Economic policy, In the Media, Latest News, Philip Cross
Reading Time: 3 mins read
A A
Blaming inflation on big corporations is ‘science denial’: Jack Mintz in the Financial Post

This article originally appeared in the Financial Post. Below is an excerpt from the article, which can be read in full here.

By Philip Cross, April 13, 2023

Despite trial balloons that the budget would make at least a token gesture at fiscal restraint, the Trudeau government remained true to its free-spending instincts. It projects continued large budget deficits averaging nearly $40 billion over three years, even though the pandemic is over, with no plans to balance the budget on the horizon. Ongoing fiscal stimulus works against the Bank of Canada’s tightening of monetary policy to combat inflation and risks keeping interest rates higher for longer.

It is just as well the government did not try to pose as fiscally responsible, as its track record of constantly overshooting planned spending has shredded its credibility. Former Finance Minister Bill Morneau’s recent book, Where To From Here, described how the absence of a fiscal target and constant meddling from the Prime Minister’s Office “shattered any pretense of fiscal restraint.” Moreover, the deficit does not fully capture the extent of fiscal stimulus, as households continue to draw on savings accumulated from overly generous government support programs in 2020 and 2021. Morneau admitted the Department of Finance knew at the time “we would be distributing billions of dollars more than was actually needed under the circumstances.”

But pandemic spending is not the source of today’s deficits. The main reason the federal deficit remains elevated is a nearly 30 per cent increase in non-pandemic program spending since 2019. Ottawa is also paying much higher interest rates on its debts, with outlays for debt servicing projected to exceed federal spending on health care by 2025. Provincial governments also have struggled to balance their budgets as they introduced tax cuts and subsidies to cushion the strain of inflation on household finances. But the persistence of the federal government’s deficits is more notable since it alone has a joint agreement with the Bank of Canada to control inflation, which implicitly commits it to conduct fiscal policy in a manner consistent with achieving the inflation target.

***TO READ THE FULL ARTICLE, VISIT THE FINANCIAL POST HERE***

Source: Financial Post
Tags: FinanceinflationPhilip Cross Financial Post op-ed
Previous Post

How the West must prepare for a world after Putin’s defeat in Ukraine: David McDonough in the Hub

Next Post

Macron’s faux pas and Beijing’s trap: J. Michael Cole in the Globe and Mail

Related Posts

Ukraine must be victorious, for all of our sakes: Balkan Devlen for Inside Policy
Columns

Ukraine’s right to self-defence is self-evident: Chris Alexander in the Globe and Mail

June 2, 2023
Trudeau, Ford to blame for Stellantis shakedown: Aaron Wudrick in the National Post
Columns

Trudeau, Ford to blame for Stellantis shakedown: Aaron Wudrick in the National Post

June 2, 2023
Canada’s inadequate defence research funding is more than just a security risk: Richard Shimooka in the Hub
Columns

Canada’s inadequate defence research funding is more than just a security risk: Richard Shimooka in the Hub

June 1, 2023
Next Post
Macron’s faux pas and Beijing’s trap: J. Michael Cole in the Globe and Mail

Macron’s faux pas and Beijing’s trap: J. Michael Cole in the Globe and Mail

Newsletter Signup

Follow us on

Macdonald-Laurier Institute

323 Chapel Street, Suite #300
Ottawa, Ontario, K1N 7Z2 Canada

613.482.8327

info@macdonaldlaurier.ca
MLI directory

Support Us

Support the Macdonald-Laurier Institute to help ensure that Canada is one of the best governed countries in the world. Click below to learn more or become a sponsor.

Support Us

  • Inside Policy Magazine
  • Annual Reports
  • Jobs
  • Privacy Policy

© 2021 Macdonald-Laurier Institute. All Rights reserved.

No Result
View All Result
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy Program
      • Energy
      • Environment
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • The Great Energy Crisis
    • Centre for Advancing Canada’s Interests Abroad
    • Dragon at the Door
    • Canada and the Indo-Pacific Initiative
    • The Transatlantic Program
    • DisInfoWatch.org
    • An Intellectual Property Strategy for Canada
    • Competition Policy in Canada
    • Speak for Ourselves
    • Justice Report Card
    • COVID Misery Index
      • Provincial COVID Misery Index
      • Beyond Lockdown
      • COVID and after: A mandate for recovery
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Past Projects
      • The Eavesdropping Dragon: Huawei
      • Talkin’ in the Free World with Mariam Memarsadeghi
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
      • Straight Talk
      • Labour Market Report
      • Leading Economic Indicator
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy Magazine
      • Inside Policy Online
      • Inside Policy Back Issues
    • Papers
    • Commentary
    • Columns
    • Books
    • Video
    • Podcasts

© 2021 Macdonald-Laurier Institute. All Rights reserved.