Opposition Grates Trudeau on Inflation, Housing as Economic Issues High on Parliament’s Agenda
The economic woes of housing inflation and the cost of a tank of gas were the main concern of opposition parties on Wednesday as they toasted Prime Minister Justin Trudeau in the first Question Period since June and against the background of rising consumer prices.
Parliament’s return this week coincides with the biggest surge in consumer prices in nearly two decades that eats away at the purchasing power of a dollar and erodes wages. The resulting affordability issues are addressed by all parties in the House of Commons as the Liberals seek to show they are working on solutions while the opposition tries to shift some of the blame on the burden. from the Prime Minister’s portfolio.
Mr. Trudeau was derided by Conservative Leader Erin O’Toole’s First Bank over his understanding of issues for ordinary people, while Deputy Leader Candice Bergen challenged him to name the price of the commons as bread, bacon and beans, and surfboards – one of Prime Minister’s favorite vacation activities.
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âThe Prime Minister says he doesn’t think much about monetary policy. It’s no surprise, after all, it’s Justin-flation, âadded Conservative finance critic Pierre Poilievre. âHas he had time, since he left the surfboard, to think a little more about monetary policy? he asked Mr. Trudeau.
The Prime Minister has called the searches, done in both official languages, a “stupid partisan game” while the Liberals focus on Canadians.
“We are extremely concerned about the increase in the cost of living brought to people by inflation,” he said.
“If the member for Carleton spent more time doing his homework and less playing puns, he might understand that the whole world is in the grip of an inflation crisis,” Trudeau said. During the hour-long exchange with MPs, he repeatedly highlighted his government’s plans to address affordability issues, increase housing supply and reduce child care costs.
âIt is real help that the Conservatives here in this House have opposed,â he said.
Coming out of the Liberal Party caucus meeting on Wednesday, Toronto MP John McKay said inflation is a “serious problem” and a “legitimate concern” for his constituents, but added that it is not. not at a “light your hair on fire” level.
Canada’s annual inflation rate hit an 18-year high of 4.7 percent in October and has been above the Bank of Canada’s inflation target range of 1 percent to 3 percent since. April.
The central bank, which is charged with keeping inflation under control, attributes the rise in prices in large part to soaring energy prices and bottlenecks in the global supply chain. Other factors include a rebound in demand for services that have been shut down by the pandemic and a drought that has hit the Prairies, devastating crops and herds of animals and driving up food prices. Flooding in British Columbia last week that destroyed critical transportation infrastructure could worsen the supply chain situation.
âObviously people are concerned about the cost of living. â¦ The challenge [for opposition politicians] is whether people think this is something Trudeau somehow caused, âsaid Ken Boessenkool, lecturer at the Max Bell School of Public Policy at McGill University. and former conservative economic adviser.
âJustin Trudeau did not cause the flooding in British Columbia. It did not cause the blockade of ports in China. And while you might think it would be good if he did more to stop these things, I don’t think the people at the top are going to blame him, âProf Boessenkool said.
The strength and persistence of high inflation – experienced by countries around the world – took the Bank of Canada and other central banks by surprise. Bank of Canada Governor Tiff Macklem acknowledged this month that high inflation would be “transient but not short-lived.”
It also prompted central banks to start tightening monetary policy earlier than expected. The Bank of Canada ended its government bond purchase program last month and now plans to start raising interest rates in the middle of next year.
Nevertheless, inflationary pressures are expected to persist for some time. The central bank expects inflation to stay close to 5% for the remainder of the year, and average 3.4% next year.
Opposition MPs also focused on housing affordability, a constant concern that has worsened over the past year with soaring house prices. The average price of homes has jumped more than 30% since the start of the pandemic. Bank of Canada Deputy Governor Paul Beaudry on Tuesday warned that heavily indebted households pose a risk to economic stability as interest rates rise, and said a surge in real estate speculation during the pandemic increased the chances of a correction in the housing market.
Canadians are seeing “the forces of speculation driving up the cost of housing and this federal government and previous governments have not invested enough money into building homes that people can actually afford,” the federal government said on Wednesday. NDP Leader Jagmeet Singh.
âHousing is a top priority for this government and we will address it,â Trudeau said, underscoring the government’s commitment to help municipalities build more housing, increase access to affordable housing and facilitate the access of first buyers to the market.
Economists and housing market experts have expressed skepticism about some of the Liberals’ housing plans, especially those aimed at putting money in the pockets of home buyers.
âIt is even more unlikely that the promised housing measures will provide short-term relief from inflationary pressures. In fact, housing markets could be marginally fueled by further demand-side measures, âwrote Rebekah Young, director of fiscal and provincial economics at the Bank of Nova Scotia, in a note to clients. after the Speech from the Throne on Tuesday.
âNonetheless, the government’s housing supply ambitions are laudable – and essential to a more balanced environment between housing supply and demand in Canada,â she wrote.
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