Economists worry excessive or untargeted measures by Ottawa could work against the BoC's efforts and force it to further hike interest rates
OTTAWA — Canada's inflation rate likely took another dip last month, but with many Canadians still struggling with the cost of living, the federal government is facing pressure to deliver more help in the upcoming budget.
But even as inflation eases, the federal government has signalled the budget will include affordability measures to help Canadians still challenged by the cost of living. The Bank of Canada has been laser-focused on bringing inflation back down to its two per cent target. Its aggressive rate hike cycle over the last year is starting to slow the economy by forcing people and businesses to pull back on spending.
But the Liberals are also facing pressure from New Democrats to continue providing support for low-income Canadians who are hardest hit by inflation. Inflation has become a top political and economic concern in the country after a significant runup in prices last year, driven in part by the Russian invasion of Ukraine and mangled supply chains.
"As long as inflation continues to trend lower as we expect ... will probably stay on the sidelines," Freestone said.
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