Prime Minister Justin Trudeau and Canada’s Deputy Prime Minister and Minister of Finance Chrystia Freeland arrive for a federal cabinet retreat over the next three days in Hamilton, Ontario, Canada January 23, 2023. REUTERS/Carlos Osorio
By Steve Scherer
OTTAWA (Reuters) -Canadian Finance Minister Chrystia Freeland said on Tuesday her approach to this year’s budget, due out sometime this spring, would be carefully calibrated due to a high level of uncertainty in the global economy.
“There is still a lot of uncertainty in the world economy, and that means that we do need to continue to take a fiscally prudent approach,” Freeland said in answer to a reporter’s query about this year’s budget that was streamed online.
“We still do not know for sure how the plane is going to land. We do not know for sure how the COVID recession is going to finally play out,” she said in Hamilton, Ontario on the sidelines of a meeting of cabinet ministers.
Last fall, Freeland promised not to make the central bank’s job of taming decades-high inflation harder when she presented a fall fiscal update, which did however include C$11.3 billion in new spending that some analysts said was too much.
Inflation is still over 6% – more than three times the central bank’s 2% target. The Bank of Canada will announce its latest interest-rate decision on Wednesday, with analysts forecasting a quarter-point increase and then likely a pause.
The government has already said it was willing to increase health transfers to the provinces this year, and that it wanted to invest to make Canada more competitive with the United States as it pivots toward green technologies.
Canada has also pledged to bolster its own military and to keep helping Ukraine with weapons and aid.