Trudeau’s Liberals will provide an update on the state of the federal government’s public finances on December 14.
The document will also provide the government’s projections for an economy facing high inflation, flooding in British Columbia and the emergence of a new variant of COVID-19.
Finance Minister Chrystia Freeland said on Thursday the government recognizes the importance of being transparent with the public about the state of public finances.
The update will be delivered just three days before Parliament adjourns for the winter recess.
Rising oil prices, among other economic factors, are expected to boost government tax revenues, giving the Liberals additional fiscal leeway.
This additional leeway could reach $ 10 billion, according to economist Kevin Milligan of the University of British Columbia.
The Liberals pledged to spend $ 100 billion on stimulus and pledged billions more during the election campaign, fueling expert warnings. Some fear that overspending could stoke inflation by increasing consumer demand, at a time when the supply of goods simply cannot keep up.
“It seems to me that by combining that with all the savings that Canadians currently have, it’s a lot of money in the economy in the short term,” said Robert Asselin, senior vice-president of policy at the Business Council of Canada. and who previously served as Policy and Budget Director for Liberal Finance Minister Bill Morneau.
“Rather, we have to be careful not to fuel greater consumption, greater demand, which would worsen inflation,” he said.
Scotiabank provincial economic and fiscal policy director Rebekah Young says messages from the Department of Finance suggest a minimalist update without major new spending.
She argues that it would make sense for Ottawa to wait a bit before jumping into the bulk of the $ 53 billion in net new spending promised during the election campaign – at least for now, until rates hit. inflation are starting to drop.
“I think these expenses still have a good chance of seeing the light of day, but not until the holiday break,” said Ms. Young.