With inflation pressures rising, Liberals to give budget update mid December

The Trudeau Liberals will provide an update on the health of federal finances on Dec. 14.

The document will also provide the government’s outlook for an economy facing high inflation rates, flooding in British Columbia and the emergence of a new variant of COVID-19.

Finance Minister Chrystia Freeland says the government knows it is important to be transparent about the country’s finances.

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Higher oil prices among other economic factors are expected to pad the government’s bottom line by several billion dollars, giving the Liberals extra budgetary breathing room.

The Liberals have promised to spend $100 billion in stimulus, and pledged billions more in the election campaign, which has stoked warnings from experts that too much spending could fan inflation.

Rebekah Young, Scotiabank’s director of fiscal and provincial economics, says messages coming out of the Finance Department point to plans to release a minimalist update instead of one with many new spending measures.

Statistics Canada says the annual pace of inflation in October rose to 4.7 per cent as the consumer price index posted its largest year-over-year gain since February 2003.

The increase compared with a year-over-year increase in the consumer price index of 4.4 per cent in September.

The agency said Wednesday that factors contributing to the increase included snarls in supply chains, bumps in prices at the pump and comparisons to lows seen one year earlier.

Statistics Canada said gasoline prices rose 41.7 per cent compared with October 2020 for the fastest increase since this past May.