Canada's Liberal government, deeply unpopular in polls and facing an election in the next year, unveiled a mini stimulus package to help cash-strapped households struggling under higher debt payments.
The measures include a temporary, two-month sales-tax exemption on certain goods and services, such as prepared meals from restaurants and grocers, beer and wine, and children's clothing and diapers. Furthermore, the Liberal government will issue an onetime cash transfer to individuals who earn less than 150,000 Canadian dollars a year, or the equivalent of US$107,000. Those people are eligible for a C$250 payment.
Prime Minister Justin Trudeau, accompanied by Finance Minister Chrystia Freeland, said the measures are aimed at easing household budgets.
"Canadians are struggling to get by," Trudeau said. "For two months, Canadians are going to get a real break."
The most recent Canadian data, covering the second quarter, indicates household spending has slowed sharply. The Bank of Canada said consumer expenditures on a per-capita basis have declined--a reflection, officials said, of the delayed crunch from past interest-rate increases and softness in the labor market.
Economic softness has prompted the Bank of Canada to be the most aggressive among Group of Seven central banks in cutting interest rates, after raising them aggressively to tame inflation.
The Trudeau government has struggled in public-opinion polls since mid-2023, trailing the Conservative Party by between 15 and 20 percentage points. Pollsters and political analysts say the Liberal government's failure to address pocket-book issues amid higher prices and elevated interest rates has weighed on support.
A poll issued Thursday from Ottawa-based Abacus Data indicates 43% of Canadians would vote for the Conservative Party, while the Liberals and the left-wing New Democratic Party are tied at 21%. The Abacus poll indicates that 61% of Canadians believe the country is headed in the wrong direction.
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