The Business Council of Canada is urging Finance Minister Chrystia Freeland to avoid new spending in the fall economic update and to set a clear fiscal anchor focused onCouncil president and chief executive officer Goldy Hyder sent a letter this week to
The Finance Department has long relied on an average forecast of key metrics such as GDP growth and inflation from private-sector economists as the foundation of its budget and fiscal update forecasts.Mr. Hyder said that in light of higher borrowing costs, the fiscal update should avoid announcing permanent new spending funded through deficits. The government has indicated it is looking at options for new spending on housing and national pharmacare.
Ms. Freeland’s current fiscal anchor is to keep the debt-to-GDP ratio on a declining trend. However Parliamentary Budget Officer Yves Giroux has expressed concern that the government has allowed short-term deviations in that trend. The direction of Ottawa’s fiscal policy was the focus of a day-long debate Tuesday on the floor of the House of Commons.used a designated opposition day to trigger a debate on federal fiscal policy, with a motion calling on the government “to introduce a fiscal plan that includes a pathway back to balanced budgets, in order to decrease inflation and interest rates.” The motion also calls for the plan to be introduced before the Bank of Canada’s next interest rate decision on Oct. 25.
Liberal MPs who spoke during the debate highlighted the fact that inflation is coming down and pointed to various recent government announcements aimed at addressing cost-of-living concerns.