"Two big areas that are calling out for federal investment" are healthcare and "building the clean economy of the 21st century," she said, adding she would be fiscally responsible "even as we need to make these two big investments." The Bank of Canada last week hiked its key interest rate to 4.5%, the highest level in 15 years, and became the first major central bank fighting global inflation to say it would likely hold off on further increases for the time being. The bank has lifted rates at a record pace of 425 basis points in 10 months to tame inflation, which peaked at 8.1% and slowed to 6.3% in December, still more than three times the 2% target.
"I know that interest rates represent a very, very heavy
challenge for a great number of Canadian families and therefore
the federal government has to adopt a fiscally responsible
approach," Freeland said.
Freeland had promised not to make the central bank's job of
taming decades-high inflation harder when she presented a fall
fiscal update, which did however include C$11.3 billion ($8.43
billion) in new spending that some analysts said was too much.
Freeland is due to present the budget to parliament in
the spring, but a date has yet to be fixed.
($1 = 1.3401 Canadian dollars)
(Reporting by Steve Scherer and Ismail Shakil; Editing by Chris
Reese and Marguerita Choy)
