The Canadian economy is about to go through a period of turbulence, Prime Minister Justin Trudeau admitted on Tuesday.
Asked when he arrived at Cabinet whether he expects the country to go through a recession, Mr. Trudeau simply replied that “we expect to be there for the families who need it, whatever the circumstances “.
However, he was more loquacious in English when confronted with the remarks of the Minister of Finance, Chrystia Freeland, who, the day before, solidly flirted with the word recession by describing how the “economy will slow down”.
Mr. Trudeau then said that Canadians know that “head winds”, either headwinds or turbulence, are coming.
“We’ve seen interest rates go up,” he added. We have seen the cost of living increase. This is why we have taken concrete action. The GST credit will be paid in the coming weeks to Canadian families, 11 million Canadian families who will receive nearly $500 in additional support this fall. »
In her speech delivered Monday in Gatineau, Ms. Freeland said she wanted to give Canadians “the truth” about what awaits them.
“Even if inflation recedes in the coming months, the situation will remain difficult,” she said. […] Our economy will slow down as the central bank has to tackle inflation. Many people will see their mortgage payments increase. Business will no longer be as good as it has been since deconfinement. And the unemployment rate will no longer be at a historic low. »
Ms. Freeland then maintained that the next few months will be “demanding”, that her government will help Canadians navigate “these troubled waters” and weather “the downturn that is coming, in Canada and around the world”.
Although a growing number of observers are expecting a possible recession next year, the Bank of Canada has not changed its position on interest rate hikes and maintains its objective of bringing inflation back to its target of 2%, supported in the last days its governor, Tiff Macklem.
Statistics Canada is due to release its latest inflation data for September this week. The Bank of Canada will announce its next decision on interest rates next week, and will publish an update of its economic forecasts at the same time.