Bank of Canada governor Tiff Macklem has warned fiscal and monetary policy are working at cross-purposes.

“It would be helpful if monetary and fiscal policy was rowing in the same direction,” Macklem told a parliamentary committee on October 30.

Macklem said Canadian federal and provincial government spending would grow approximately 2.5%, which would be greater than growth in supply of 2%, and thus inflationary. “That would not be helpful in getting inflation down to target,” he said.

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