QUESTION PERIOD — Finance
Monetary Policy
November 25, 2021
Honourable senators, my next question is for the government leader as well and concerns the cost-of-living crisis in our country.
Last week, Statistics Canada reported that inflation is at its highest level in 18 years. In August, during the federal election campaign, the Prime Minister admitted that he doesn’t think about monetary policies. I believe him. It is clear he never thinks about these. But massive inflation is making everyday life unaffordable for Canadians. These Canadians are thinking about monetary policies.
On December 31, the agreement between the Bank of Canada and the Government of Canada on our country’s inflation-control target will lapse — just over a month away. We still don’t know the Trudeau government’s position on this. Leader, you didn’t have an answer for Senator Bellemare yesterday, so perhaps I will have better luck. Will the inflation-control target be renewed at its current rate of 1 to 3%, yes or no?
Thank you for the question. I don’t know the answer to your question. I do know, however, that this government remains focused on the important question of affordability and the cost of living for Canadians. The government has reached its target of 1 million jobs. It has restored employment back to pre-pandemic levels. In addition, the work that is being done to reach agreements with provinces, to establish early learning and child care centres across the country; it’s a strong policy to improve affordability for families in all parts of the country.
I’m advised that the government is confident that the prudent plan it has put forward sets out a new fiscal anchor that is committed to reducing the federal debt as a share of the economy over the medium term, and unwinding the deficits that were created as a result of expenditures and investments in COVID-19. The government remains committed to assisting Canadians as we transition from this period to a better one going forward.
That was a pretty long no.
Tuesday’s Speech from the Throne mentioned inflation only once. The Trudeau government’s total lack of interest in monetary policy has real consequences, leader, for Canadians. On average, families are paying almost $700 more for groceries this year compared to 2020. Year over year, home prices are more expensive all across Canada by as much as 30% in the Greater Toronto Area and in New Brunswick. I’m finding this myself; we’re building a new house.
Leader, the decision to keep the current inflation target should be an easy one for the Trudeau government to make, or is your government content to simply stand by while the cost of living gets more and more unaffordable for Canadians?
The Government of Canada is not standing by. On the contrary, it’s assisting Canadians with the ability and the levers it has at its disposal, and the government is confident that its measures will make a real difference in the lives of Canadians, reducing the costs with regard to some of the programs I mentioned and that were announced earlier. Again, in the interest of brevity and giving as much time for other questions to be asked, I resist the temptation to expound upon the worldwide phenomenon of inflation caused, as most economists agree, by supply chain issues and the like, and that domestic responses in terms of monetary policy may not indeed be the most effective lever. That said, the government is considering all measures appropriate to assist Canadians through this difficult time.
