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MNI (Ottawa)

Canada's Finance Minister said recent strength of the country's dollar shows global investor confidence in plans for a record deficit to bring the economy through Covid-19, taking a rare step into market commentary during her third day on the job.

"When it comes to rating agencies, when it comes to bond markets, when it comes to international investors, the reality is also that in recent months we have seen an inflow of money into Canada, we have seen a strengthening Canadian dollar," Chrystia Freeland said at a Thursday press conference. "These aren't signs of a lack of faith in the Canadian economy, quite the contrary."

Freeland didn't answer questions about the next budget or restoring a fiscal "anchor" dropped by Bill Morneau, who resigned Monday night amid reports of a policy rift with Prime Minister Justin Trudeau. She appeared alongside the employment minister to announce about CAD40 billion of new expenditures to prolong relief checks, adding to the record CAD343 billion deficit, or a postwar high 16% of GDP.

That spending is vital to saving lives during the pandemic and will strengthen Canada's economy in the medium term, Freeland said. "We will do whatever it takes to support Canadian workers, Canadian businesses in doing the right thing on the healthcare front."

Canada's dollar has strengthened 6% in the last three months and government bond yields have plunged to record lows this year amid a global rally for safe assets. Still, Fitch stripped Canada of its triple-A credit rating earlier this year, and while foreign investors have loaded up on government and corporate bonds, they have also been net sellers of Canadian stocks.

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

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