Canada’s budget projects almost C$45 billion ($41 billion) in surpluses over four years, giving Prime Minister Stephen Harper a war chest for increased spending and tax cuts ahead of next year’s election campaign.
Canadian Finance Minister Jim Flaherty ramped up efforts to return the country to surplus in a budget that raises taxes on cigarettes and cuts benefits to retired government workers while providing more aid for carmakers.
The Canadian dollar reached a four- year low for a second day on speculation the nation’s central bank may signal at a meeting next week the need for lower interest rates amid faltering economic growth.
The Canadian dollar weakened to C$1.10 for the first time in more than four years amid speculation the U.S. Federal Reserve will slow its monetary stimulus as the Bank of Canada signals more may be on the way.
Canada’s December inflation rate accelerated less than economists forecast, leaving it near the bottom of the central bank’s target band and reinforcing policy- maker warnings that price gains will be sluggish.