Poloz says cyberthreats a serious concern.

OTTAWA Now that the federal government has delivered its fall fiscal update, and we know for sure what we only thought we knew before, where do we go from here — and when?

If the federal government stays the course and manages to get the bulk of its multibillion-dollar, multi-year spending program out the door, the economy just might meet Ottawa’s goals of creating a lot more jobs and helping many more Canadian families stay ahead of their finances — budget deficits be damned.

But a lot of this beyond-the-horizon investment spree — a good portion of which is earmarked for long-promised infrastructure projects — is unlikely to be felt fully before the next national election, which is still a couple of years away.

Along a similar timeline, the Bank of Canada will need to continue to fine-tune its interestrate trajectory — one that sees borrowing costs gradually rising again next year, although that plan could change on a dime if the economy and inflation don’t behave as forecast.

So far, the central bank has nudged up its key rate twice this year — in July and September — taking the trendsetting level to one per cent. That followed a seven-year hiatus from benchmark increases as the economy clawed its way out of the depths of the global oil-price collapse that hit in 2014.

Now, after taking a pass during last week’s policy meeting, the BoC’s next rate hike could come as early as January or March — followed by two or more upward adjustments in 2018, probably beginning in September.

Then there are Ottawa’s stricter mortgage rules — introduced only a few weeks ago and aimed at dovetailing with earlier measures to help cool the housing market and, in turn, help moderate economic growth to a more sustainable level — which is the official game plan for the next few years.

Meanwhile, the Trump administration in the United States — and its anti-NAFTA stance, in particular — could still derail growth forecasts for this country, where a slowdown in GDP is already being factored into the equations for the remainder of 2017 and into 2018 and 2019.

There is very little Canadian fiscal and monetary policy-makers can do now that they haven’t already done: plan and wait.

“Government is always about balance, and in our view the balance that we’re seeking is the ability to be fiscally responsible, while making investments in the middle class and middle-class families,” said Finance Minister Bill Morneau, after releasing the government’s Fall Economic Statement last week in Ottawa.

The Liberals also face a disruptive course toward a revamped — possibly even a U.S.-Canada only — North American Free Trade Agreement, minus Mexico.

“We’re working hard with our U.S. and Mexican partners to make sure that we get to a good outcome in our NAFTA discussions,” Morneau said. “We’re going to continue to be responsible. And our first responsibility is making sure that middle-class Canadians and people struggling to get into the middle class see the benefits of our growth.”

For all of 2017, gross domestic product is expected to increase by a still-healthy 3.1 per cent — thanks to an annualized jump of 4.5 per cent in the first half of this year, followed by an overall two-per-cent growth performance over the last two quarters.

On Tuesday, Statistics Canada will release its GDP data for August, which is likely to confirm an easing in growth for the third quarter after a flat reading in July.

“We suspect that the slower start to the third quarter gives us the flavour of things to come, with our forecast for the back half of the year tracking half the pace seen at the start of 2017,” said CIBC economist Nick Exarhos, following the Sept. 29 release of July’s GDP estimate. “That’s another reason why we see the Bank of Canada using a more gentle hand with tightening from here.”

Growth in 2018 is forecast at

2.1 per cent, while 2019 should manage an increase of just 1.5 per cent, according to the Bank of Canada’s estimates, which are in line with most private-sector economists. Meanwhile, new and stricter guidelines for mortgage underwriters, announced by the Office of the Superintendent of Financial Institutions and coming into effect on Jan. 1, are expected shave 0.2 per cent off GDP by the end of 2019.

“If you think about the long sweep, the oil shock that we went through (at the) end of 2014 into 2015 had us cutting rates in the same year that the (U.S.) Fed raised rates, which does a couple of things: It just demonstrates how divergence can occur, and how an independent monetary policy needs to be directed at your objectives, not someone else’s,” Poloz told reporters in Ottawa following last Wednesday’s interest rate decision.

“But it also gave us, in effect, about a two-year delay in the process of ‘getting back home’,” said the governor, using his favourite catchphrase in describing a return to more normal economic conditions. “So, in that sense, the U.S. now is out in front of us, whereas we were more similarly situated — I would say — before the oil shock came along.”

The chief economist at Dominion Lending Centres, however, questions the “presumption that monetary and fiscal policy must both be moving in the same direction.”

“There’s nothing that suggests that’s the case. What is important is the mix of monetary versus fiscal policy,” said Sherry Cooper, who was previously an economist at the U.S. Federal Reserve Board.

“If you have higher interest rates, you may — in fact — be generating a different kind of economy than if you had lower interest rates with tighter fiscal policy,” Cooper said in a television interview. “So, extra spending for the child-care benefit or cutting taxes for the middle class — those are very specific goals that monetary policy can’t address . ... Given the strength in the economy and the government’s ideals and objectives, it does make sense for monetary policy to be tightening when fiscal policy still remains relatively easy.”