QUESTION PERIOD — Finance
Canada's Inflation Rate
April 28, 2022
Honourable senators, my question is for the Leader of the Government in the Senate. Senator Gold, the Governor of the Bank of Canada, Tiff Macklem, testified before the Senate Banking Committee. He has recognized that he and his lieutenants in the Bank of Canada have gotten it all wrong when it comes to inflation. He has also recognized that they have completely misjudged the strength of inflation. Mr. Macklem said:
If you go back to January, we were saying that inflation would peak at about 5%, and by now you start to see some signs it’s coming down. It’s now 6.7% and it’s going to take longer to come down. . . .
Government leader, will you acknowledge that Prime Minister Trudeau and his government should start recognizing the lead taken by the Governor of the Bank of Canada and recognize that they have also gotten it all wrong when it comes to inflation? Furthermore, will you also agree with me that it’s high time that Mr. Trudeau starts thinking about monetary policy?
Thank you for your question. I do not agree that the government has “gotten it all wrong.” I think we will all acknowledge that, as the governor has, one makes one’s predictions and assessments based upon the best evidence at the time. However, circumstances change and assessments have to be revised, which is the case here.
The Government of Canada is concerned with the rising cost of living for Canadians. It’s concerned about inflation and the impact that it can have on people’s well-being and expectations for the future and is considering using all of the tools that it has at its disposal as a government to do its part to address this important issue.
The first step in correcting mistakes is to recognize you’ve made mistakes. I see from your answer that there isn’t a willingness to recognize that you miscalculated as a government.
Government leader, this year the average Canadian family of four will spend $966 more on groceries than they did a year ago. In March of this year, grocery bills were 8.7% higher than just one year before. Eggs are up 8.5%, more than last month; milk is up 7.7%; pasta is up a whopping 17.8%. These aren’t fancy delicacies; they are basic food items. This comes at a time when families are already paying more for housing, for gas, for transporting their kids from home to school and back and forth. The Governor of the Bank of Canada is now saying inflation could go even higher. The word “transitory” certainly isn’t being used anymore, which was a favourite of the Minister of Finance in your government.
Senator Gold, how can you possibly defend your government’s high tax expense policies when they continue to fuel inflation, and families are already being stretched to their complete limits?
Thank you for your question. As the Government Representative in the Senate, I am advised and want to categorically state that making life more affordable for Canadians is one of the government’s primary goals, as set out in Budget 2022 that was tabled here recently.
In the long run, the government believes that the measures in the budget, along with other measures it has already taken, will contribute to addressing long-standing structural challenges and to providing meaningful improvements in living standards for more Canadians in the near term. In the near term, Canadians can remain confident that they will receive support from the government when they need it most. For example, in Budget 2022 we find a range of measures that help to bring down the cost of living, including $475 million in the year 2022-23 to provide a one-time payment of $500 to those facing housing affordability challenges. There are other measures that represent a suite of attempts to address this serious and real issue Canadians are facing.
