Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Canada reported the first monthly budget surplus since the pandemic took hold, further evidence the economy may not need the extra fiscal stimulus Finance Minister Chrystia Freeland has signaled she will include in her next annual spending plan.
The December surplus was CAD3.6 billion versus a deficit of CAD16.2 billion a year earlier, according to the Finance Department's Fiscal Monitor report released Friday. Revenue climbed 32% from a year earlier as the economic recovery boosted taxes and program spending fell 24% on decreased Covid benefits like wage subsidies.
Parliament's budget officer has told MNI lawmakers have developed a higher tolerance for deficits and business groups have complained of the stimulus is going too far and is targeted at consumption rather than long-term competitiveness. Freeland is likely to present a budget in the next few months and more stimulus would clash with a central bank headed for a series of rate hikes to curb the fastest inflation since 1991.
Canada reported a deficit from April when the fiscal year began to December of CAD70.1 billion, narrowing from the previous CAD248 billion. The government is also carrying an outsized CAD72.1 billion of cash on its books, built up as a precaution in the early Covid lockdowns.
Freeland's last fiscal update projected a CAD145 billion deficit this year, or 5.8% of GDP, and it's expected to fade to CAD58 billion the next fiscal year.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.