Inflation in Canada is not caused by the stimulus: Poloz
OTTAWA – Former Bank of Canada Governor Stephen Poloz has said government spending and stimulus are not to blame for rising inflation.
“I think that’s not fair,” he said in a CTV Question Period interview that aired Sunday. “In fact, what the stimulus did was prevent the economy from sinking into a deep hole in which we would have experienced persistent deflation.”
Inflation reached 4.7%, according to the latest figures released by Statistics Canada in October. The Bank of Canada expects it to peak at the end of this year and start declining in the second half of 2022.
âWe have to accept the fact that politics [stimulus] the response came at the right time, well intentioned and it avoided all the worst calls people were making at the time, âhe said.
In response to affordability concerns, the federal government has repeatedly referred to its national child care program as a way to fight the rising cost of living. Nine provincial and territorial governments have signed child care agreements with the federal government, while Ontario and New Brunswick have yet to sign.
Families, Children and Social Development Minister Karina Gould said in a separate interview that the inflation problem is not a uniquely Canadian problem and can be attributed to global supply chain problems. .
Conservative financial critic Pierre Poilievre says the federal government’s tax expenditures are the source of inflation.
The average inflation rate for member countries of the Organization for Economic Co-operation and Development is currently 4.3 percent, but Poilievre says the problem is just a global problem due to the fact that other central banks around the world are taking a similar approach with respect to Canada on fiscal stimulus.
âI think these are the countries that have done the best job of countering the downside risk that everyone was facing,â said Poloz. “Read a book or two on the Great Depression of the 1930s and realize what was avoided when we went through it.”
Poloz says that while governments can try to address short-term affordability issues, any government policy normally takes a year or two to have an effect on inflation.
But he expects housing inflation to persist and says these rising costs may be something the federal government can fix immediately.
“What they can do there is bring all levels of government together and come up with a list of things they should do in order to promote the supply of housing, we are clearly short of supply and housing.” , did he declare.