All of this could spell trouble for Trudeau’s economic agenda. At a time of low interest rates, this was also an opportune moment for Ottawa to borrow money to spend on infrastructure. But the finance department calculates that every one percentage point hike in interest rates boosts the deficit by $1 billion in the first year alone. If bond yields increase, the pension funds that Ottawa hopes to attract into infrastructure spending will have other places to invest their cash. Much of Trudeau’s economic strategy has been designed for a low interest-rate world.

Source: thestar November 16, 2016 11:01 UTC