Free Trial

Thoughts On The LPR Fixings


Fixed Rate Operation Offer

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access
MNI (Ottawa)

Canadian Prime Minister Justin Trudeau said Wednesday he will press ahead with expanded relief programs in an economic relaunch speech on Sept. 23, declining questions about restoring any fiscal anchor to what's already a record budget deficit.

Trudeau said he doesn't want to trigger an early election that could come if all three opposition parties reject his government's "Throne Speech" later this month. At the same time, he recently took the extraordinary step of suspending Parliament to trigger a confidence vote on his economic plan within days of the main opposition Conservative Party naming a new leader.

"Every step of the way, we will continue to be there for Canadians," Trudeau told reporters in Toronto, saying it's wrong to oppose help for families in need. He also said like the BOC did earlier today that the economy faces a long recovery following the pandemic.

Bigger spending will likely win support from some left-leaning NDP or Bloc Quebecois members of Parliament, leaving the main risk to Canada's credit rating. The already CAD343 billion deficit reported in July followed Fitch stripping Canada of its top grade. The ratings company warned of another downgrade after another CAD39 billion of more recent outlays if there's no medium term fiscal restraint.

Canada's last fiscal anchor was keeping debt to GDP around 30%, abandoned during the pandemic, and former officials have told MNI the ratio could exceed 60% in a hurry. Still, investors keen for relatively safe assets have kept federal bond yields near record lows this year, along with the BOC's QE program of at least CAD5 billion a week of federal debt.

MNI Ottawa Bureau | +1 613-314-9647 |
MNI Ottawa Bureau | +1 613-314-9647 |

To read the full story

Why Subscribe to

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.