Fiscal and monetary policy are not at odds, Bank of Canada’s Macklem tells MPs
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OTTAWA – Bank of Canada governor Tiff Macklem told members of Parliament on Tuesday he doesn’t think the federal government’s fiscal policy is at odds with the central bank’s efforts to control inflation.
Macklem was speaking at the House of Commons finance committee two days before the Liberal government plans to table its 2026 federal budget.
Conservative finance critic Michael Chong asked Macklem for his opinion on the government’s affordability efforts. The central bank governor declined to answer directly.
He said he only comments on the government’s fiscal policy when spending is approaching unsustainable levels, or when the government’s actions are working against the Bank of Canada’s efforts to tame inflation.
“In the current circumstances, I don’t think either of those criteria are met,” he said.
The Bank of Canada operates independently of the federal government to steer monetary policy, primarily by setting its benchmark interest rate
The Bank of Canada increased that key rate by a quarter-point to 2.5 per cent last week, reflecting worries about inflation pressures bubbling up from the war in the Middle East.
Macklem did comment publicly on the pace of government spending three years earlier. He warned at the time that fiscal spending was adding to demand faster than it was increasing supply, which was “not helpful” for getting inflation back under control.
Conservative Leader Pierre Poilievre regularly rails against the Liberal government over what he calls inflationary spending. He has urged the government to slash spending ahead of Thursday’s budget to help get costs under control for Canadians.
This report by The Canadian Press was first published Nov. 3, 2026.