GOVERNMENT SOURCES REITERATE BELIEF IN STIMULUS STRATEGY

Canada's $100-billion stimulus plan is justified by the economic hole caused by the COVID-19 pandemic, government sources said, as analysts warned Ottawa against racking up too much debt and making investments that fail to boost growth. The International Monetary Fund last week said Canada's fiscal risks had risen and that unjustified further spending could “weaken the credibility of the fiscal framework.” Ottawa plans to roll out the stimulus over three years. “We are far from overheating and the greater crime would be not to do enough, and 2008 is a great example of that,” said a senior source. Without the stimulus, “we run the risk of a lost generation of young people, or women who are not able to get fully back into the workforce,” said another source.

The leaders of the International Monetary Fund and the World Bank on Friday vowed to step up efforts to combat climate change by looking more closely at climate-related financial stability risk and using other tools at their disposal. World Bank president David Malpass, pictured, told finance officials from the Group of 20 economies that the Bank, the biggest provider of climate finance to the developing world, would make record climate investments for a second consecutive year in 2021. To get more bang for the buck in mitigation and adaptation, the World Bank is helping countries update their commitments or “nationally determined commitments” under the Paris climate accord, he said during a video conference. The Bank is also launching new reviews to integrate climate into all its country diagnostics and strategies, he said.