Finance Minister Chrystia Freeland on Sunday said Canada still has a path to a “soft landing,” where it could stabilize economically after the blow by the COVID-19 pandemic, without facing a severe recession that many fear, CBC News reported.

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Canada has a path to 'soft landing,' Freeland says Back to video

Freeland in an interview on Rosemary Barton Live said she has to strike a balance between helping people in Canada suffering from the effects of inflation and pursuing a policy of fiscal restraint, or risk making the cost of living problem worse.

She was open to further action on affordability issues but believes the measures already in place will help reduce the impact on Canadians, the report said.

“I have to strike a balance. One is supporting Canadians with affordability challenges and the other is fiscal restraint, because I don’t want to make the Bank of Canada’s job harder than it already is,” the report quoted Freeland as saying.

When asked about Canada’s ability to weather global economic uncertainty, Freeland “maintained an upbeat tone,” saying that the “challenge is not over, but I truly believe that we’re going to get through this together,” according to the report.

Canada’s annual inflation rate accelerated to 7.7 per cent in May, up near a 40-year high, far above Bank of Canada’s April forecast that it would average 5.8 per cent this quarter.

Freeland has earlier expressed confidence in the Bank of Canada’s ability to rein in surging inflation and keep price gains from becoming entrenched, but said there was no guarantee that the economy would avoid a recession.

© Thomson Reuters 2022