We don't have a clear picture of federal aid spending: PBO on fall fiscal update
Canada’s budget watchdog is questioning the rationale behind Prime Minister Justin Trudeau’s plan to roll out as much as $100 billion in post-COVID-19 stimulus over the next three years, saying the economy won’t need all that spending.
Trudeau’s finance minister, Chrystia Freeland, is promising to use the additional spending in order to bring the labor market back to a full recovery by 2024. In a report published Thursday, the Parliamentary Budget Office said it expects the jobs markets will normalize well before that, by early 2022.
“Our labor market projections currently suggest that the size and timing of the planned fiscal stimulus may be mis-calibrated,” Yves Giroux, the parliamentary budget officer, said in the report.
In a fiscal plan released last week, Freeland said her department will use three labor market indicators as so-called fiscal guardrails to determine how much stimulus to deliver into the economy. She provided a range of $70 billion to $100 billion in planned spending over three years. That’s on top of more than $300 billion in already-budgeted stimulus since the start of the pandemic.