Bank of Canada Governor Tiff Macklem told MPs on Feb. 16 that if the Liberal government increases spending in some areas it could hurt his current forceful approach to rein in inflation.
Testifying before the House of Commons finance committee, Macklem took questions about the impact of government spending on his inflation fighting mission as the next budget approaches.
“If there are new fiscal spending plans, we’ll have to take those on board,” he said, adding that some spending mostly adds to demand.
“In an environment where the economy’s already overheated, that wouldn’t be terribly helpful.”
The Bank of Canada’s (BoC) governing council said in its January rate deliberations released on Feb. 8 that while the economy is slowing due to rate hikes, there’s more excess demand than expected….