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Economics

Trudeau Says New Spending Won’t Fuel Inflation. Scotiabank Disagrees

  • Canadian PM unveils tax rebate, rent relief, dental care plan
  • New firebrand Tory leader also pushes back against measures
Justin Trudeau struck a power-sharing deal with the left-leaning New Democratic Party that included funding for dental care and housing.
Justin Trudeau struck a power-sharing deal with the left-leaning New Democratic Party that included funding for dental care and housing.Photographer: Cole Burston/Bloomberg
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Prime Minister Justin Trudeau announced a package of measures to help Canadians cope with steeply rising prices, with a major bank and his main rival warning the new spending will only make the problem worse.

The government will double for a period of six months a sales tax rebate received by low-income earners, at a cost of C$2.5 billion ($1.9 billion). It will also top up a housing benefit for renters, worth about C$700 million in additional spending, and fund a promised dental-care plan.