Can the federal budget reset Canada's economy?

By just about every measure, Canada’s economy is stuck in a ditch. Growth has sputtered. The unemployment rate is rising.

In normal times, the reme dy is clear. The Bank of Canada cuts interest rates and the federal government boosts spending to help businesses and households weather the storm.

These are decidedly not normal times.

And Bank of Canada governor Tiff Macklem knows it.

"The structural damage caused by tariffs is reducing our productive capacity and adding costs. This limits the ability of monetary policy to boost demand while maintaining low inflation," said Macklem last week.

Lowering interest rates can only do so much, he says. And in this uniquely weird moment for the Canadian economy, he says monetary policy has a limit.

"It can't target specific sectors. It can't