Mr. Speaker, the Department of Finance regularly conducts research on a wide range of economic policy areas. The Department of Finance does not routinely track the starting dates of analytical projects. The end date can also be fluid since analytical work might be substantially complete on one date but discussed internally, and potentially revised, for some time after that.
Some common methodological concepts used in these analyses include dynamic general equilibrium models with nominal price and wage rigidities, qualitative analysis, semi-structural macroeconomic forecasting models and more. Relevant topics could include, but are not limited to, simulation of the effects of fiscal policy on monetary policy decisions and inflation, analysis of inflation, and monetary policy impacts of government consumption spending under various assumptions about monetary policy reaction. This analysis informs advice to, and decisions made by, the Minister of Finance regarding fiscal and economic policy.
As always, it is important to note that monetary policy is solely the purview of the Bank of Canada and that this independence is critical to Canada’s economy.
The department’s analysis can be seen in regular budget documents. As an example, see annex 1 of the recent 2023 fall economic statement at https://www.budget.canada.ca/fes-eea/2023/report-rapport/anx1-en.html. The forecasts and models described in this annex are informed by the analytical work of the Department of Finance, using inputs from the September 2023 private sector survey. See, for example, beginning on page 88, descriptions of different economic scenarios as modelled by the Department of Finance at https://www.budget.canada.ca/fes-eea/2023/report-rapport/FES-EEA-2023-en.pdf.