The government predicted the deficit for last fiscal year would be $354.2 billion, and nearly $155 billion this year.
But federal books could have billions more in extra fiscal space helped by higher oil prices, which have also helped push up inflation rates.
Freeland didn’t directly answer a question Monday about how that will be reflected in today’s update, saying she would have more to say once the document is released.
While the Liberals promised billions in new spending on the election campaign, the Finance Department has sent signals that the update won’t have a long list of new spending measures.
One measure was unveiled Monday, as the government set aside $40 billion to compensate First Nations children and undertake long-term reforms to the child-welfare system.
Economists suggest that some promised spending might be delayed because it could add to inflationary pressures.
While the Bank of Canada has a mandate to keep inflation in check, the government agreed Monday it plays a role in helping the central bank maintain inflation around its two-per-cent target.
BMO director of Canadian rates Benjamin Reitzes said the wording could be a sign that the government recognizes it is time to stand down a bit on its stimulus spending.
Freeland is facing calls for more benefit spending from labour groups, and requests from business groups for a plan to deal with supply-chain issues, “Buy American” provisions the White House is pushing and domestic labour shortages.
Dennis Darby, president of Canadian Manufacturers and Exporters, says the issues could weaken the economic rebound from COVID-19.