Trudeau Says Spending Won’t Fuel Inflation. Scotiabank Disagrees

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.

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

Tuesday’s measures are “sufficiently targeted that we are confident they will not contribute to inflation,” ...