Macklem Says Fiscal Policy Is Not Hindering Inflation Fight

Canada's current fiscal policy is not making the inflation fight harder, Bank of Canada Governor Tiff Macklem told the House of Commons finance committee, according to Reuters' November 3, 2026 report. He said the Bank's tests for commenting on fiscal policy, unsustainability or interference with returning inflation to target, were not met. Reuters also reported his warning that more interest rate increases might be needed.

In his opening statement to the committee, dated November 3, Macklem said fiscal measures would support business investment and the economic recovery. That gives us a narrower conclusion than a general endorsement of government spending: the governor sees no current fiscal obstacle to the inflation fight, while still seeing a possible need for tighter monetary policy. The Bank raised its policy rate to 2.50% last week. That increase took place on October 28; today's testimony keeps further increases possible, with decisions taken one meeting at a time.

Why leave that possibility open? In the same opening statement, Macklem said businesses had mostly absorbed higher input costs so far, but the Bank expected more pass-through over the next year. He projected inflation remaining at or above 3% through much of 2027. For us, that connects today's guidance to the pressure examined in Canadian Consumers Lift Long-Term Inflation Expectations. Government investment can support recovery while expensive energy works through production and transport bills. The fiscal-policy answer does not remove the cost pressure behind the Bank's warning.

For your unhedged gold holdings, the Canadian dollar remains a separate calculation. If the loonie strengthens while the US-dollar gold price stays unchanged, the same ounce converts into fewer Canadian dollars. A weaker loonie works in the opposite direction. Today's testimony gives us neither an exchange-rate target nor a measured currency reaction, so we would keep both outcomes in the valuation. We own gold and gold stocks, and we would not treat reassurance about fiscal policy as a promise of higher Canadian-dollar bullion returns.

For your mining shares, we would also keep the funding plan beside the metal-price assumption. A producer with cash after investment has more room to absorb expensive inputs than a developer whose next construction commitment requires fresh financing. That is our preference under the risks Macklem describes, rather than a conclusion about any named company's balance sheet. Floating-rate debt, fixed-rate maturities and currency hedges can leave similar projects with different exposures. We would want the investment case to survive further tightening before counting on cheaper borrowing to fund the next stage.

We will check the Bank's deliberations summary on November 10, listed in its publication calendar, then its next rate decision on December 9, in the policy schedule.

Seek the truth and be prepared,

Equedia News

Sources

• Reuters, Bank of Canada head says fiscal policy not hitting fight against inflation, November 3, 2026
• Bank of Canada, Opening Statement before the House of Commons Standing Committee on Finance, November 3, 2026
• Bank of Canada, Press and upcoming publications, consulted November 3, 2026
• Bank of Canada, 2026 schedule for policy interest rate announcements and other major publications, August 2025
• Equedia News, Canadian Consumers Lift Long-Term Inflation Expectations, October 19, 2026

Disclaimer: This letter is for informational and educational purposes only and does not constitute investment advice. Past predictions and performance are not indicative of future results. We own gold and gold stocks. Please see our full terms of use and disclaimer at equedia.com.