Canada to Outline New Forecasts and Fiscal Situation as Inflation Surges

Canada’s Prime Minister Justin Trudeau is about to outline new fiscal and economic forecasts in a document that will be released tomorrow on Tuesday amid the rising inflation and spending reticence call from some business groups and opposition politicians.

A source told Reuters last week that the fall economic update (FES) will be released at 4 p.m. ET (1900 GMT) and is likely to include some new spending as well. The FES will be "limited in scope" in terms of expenditure.

Trudeau recently pledged C$78 billion ($61 billion) in a new investment over five years to support Canada's economic rebound during the campaign ahead of his September re-election.

Tony Stillo, director of Canada economics at Oxford Economics said, "My reading of the tea leaves would be: Even if the fiscal statement is light, it doesn't mean that the upcoming budget will be."

The government is expected to release its 2022-23 fiscal-year budget during the first part of next year. This fiscal year's budget included C$101 billion in investments over three years. Business lobbies and the opposition Conservative Party have urged the government to scale back spending after inflation hit an 18-year high. This is also because the costs to service the country's debt are expected to start rising next year, Reuters report added.