Bank of Canada's Macklem says federal budget won't have much impact on inflation

Bank of Canada Governor Tiff Macklem waits to appear before the Senate Finance Committee, in Ottawa, Wednesday, May 1, 2024. THE CANADIAN PRESS/Adrian Wyld

Bank of Canada governor Tiff Macklem says he doesn't think the federal budget tabled last month will have much of an effect on inflation.

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Macklem was testifying at a Senate committee alongside senior deputy governor Carolyn Rogers following the central bank's latest interest rate announcement.

The governor says the spending plan hasn't changed the federal government's fiscal track by much.

Macklem says that's why he doesn't expect it to have a significant impact on economic growth or inflation.

Finance Minister Chrystia Freeland's budget offsets new spending with higher taxes and stronger-than-expected government revenues, which has kept the deficit in check.

The Bank of Canada has been encouraged by progress made on getting inflation down and has signalled that it's inching closer to cutting interest rates.

This report by The Canadian Press was first published May 1, 2024