In a Bloomberg
interview on Thursday (March 17), Prime Minister Justin Trudeau called for the use of more fiscal instruments and less intervention in monetary policy.
“We should be using fiscal levers a little more and not just expecting monetary policy to have to fix the challenge we’re in. I think we’re approaching the limit of the impact of monetary policy alone,” Trudeau told interviewers, as quoted by the Financial Post
The Prime Minister said that the latest meeting between G20 finance ministers floated the question of what fiscal measures would be most effective in jump-starting struggling economies such as Canada’s. Trudeau added that officials should avoid fiddling with currency and monetary policy, which might have unpredictable effects in the long run.
“My job as a politician and a leader is, regardless of where the dollar finds itself, we’re creating an economy resilient and diverse enough to be able to benefit from it,” he stated. The loonie reached its lowest point in 13 years at the beginning of 2016, but has since recovered by 11 per cent.
“The Canadian dollar has bounced around a bit. There’s a range in which it is comfortable and we tend to be in that now,” Trudeau said.
The statements came less than a week before the administration is set to release its latest budget on March 22. The budget is expected to include a massive $30 billion federal deficit, a shortfall that has prompted various quarters to petition for greater government intervention in the fiscal system.