Amid soaring inflation and rising interest rates, the federal government finds itself in a difficult position as helping Canadians with affordability issues may further stoke inflation flames.
The fall update this year should be light on new spending, especially when compared with recent updates. However, the government still announced ahead of the update a few targeted measures aimed at helping affordability.
These targeted measures include helping uninsured parents cover children’s dental costs, temporarily doubling the GST credit for low-income earners, and a one-time top-up the Canada Housing Benefit.
The recent increase in commodity prices will certainly help resource-rich provinces, but structural issues will continue to weigh on the fiscal outlook.
And, with provinces now facing rising interest rates and high inflation, spending will be kept in check over the near term.
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