The Federal government is betting that its modest deficit and strong oil prices will enable the unemployment rate to stabilize at 5.5 % despite the Bank of Canada‘s mistaken decision to embrace a series of interest rate rises as a misguided weapon against supply chain rises in prices and the inflation rate. But what is the projected rate of inflation ? The budget projects it as 3.9 % rise in the CPI in 2022-23 and 2.4 % in 2023-24. There is a risk in this policy approach that the Bank of Canada will have a stronger negative impact than they anticipate. Mistaken expectations are an economic fact of life. We shall see what happens over the next year.
There are also a number of good things in the budget including a dental services support program, which is unfortunately income tested, an opening initiative in the long term battle to ensure quality housing for as many people as possible and a strong fiscal anchor in the debt to GDP ratio projected to be 45.1%, increased spending on defense and more aid to Ukraine.
I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
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