Treasury Secretary Chrystia Freeland says she needs to find a balance between helping Canadians suffering the effects of inflation and pursuing a policy of fiscal restraint or risk exacerbating the cost of living problem.
In an interview that aired on Sunday Rosemary Barton liveFreeland, who is also Deputy Prime Minister, said she was ready to take further action on accessibility issues but believes the $8.9 billion measures already being taken will help mitigate the impact on Canadians.
“I have to find a balance. One is supporting Canadians with affordability issues, and the other is fiscal restraints because I don’t want to make the Bank of Canada harder than it already is,” Freeland told CBC chief political correspondent Rosemary Barton. .
The Bank of Canada is mandated to maintain an inflation target in Canada of two percent (ranging from one to three percent) per annum. Freeland said the bank has a duty to fight inflation and she respects its independence.
In a speech earlier this month, she argued that previously announced programs, including increases in benefits for low-income workers, increases in other inflation-indexed benefits, and the implementation of government childcare and dental programs, would help address affordability issues. .
Freeland echoed that point in an interview aired Sunday, saying the money from these programs has already gone to Canadians.
“It’s okay to be angry”
The Treasury Secretary acknowledged that many Canadians are frustrated by rising prices, especially for basic everyday goods. She said that friends have sent her photos of prices in stores, and she knows that products are more expensive.
“And for many Canadians, this is a real challenge. I really understand that,” she said.
When asked about the general anxiety of many Canadians about the economy, Freeland responded in the same tone.
“I say it’s okay to be angry,” she said. “It’s okay to be angry with me. I do understand that this is an incredibly challenging economic time. It’s very, very difficult for a lot of people.”
The federal government has been criticized over inflation by both opposition conservatives and new Democrats. The Liberals have a confidence agreement with the NDP to keep the minority government afloat with key votes.
Opposition on the attack
In response to Freeland’s speech, Conservative MPs Dan Albas and Gerard Deltel issued a statement criticizing what they call the government’s “tax and spending” strategy.
“This misguided economic approach is eating into the earnings of hard-working Canadians and ignoring the most basic tenet of economics: Spending during an inflationary crisis will only fuel inflation further. inflationary pain for Canadians.”
The NDP, which claims corporations are taking advantage of inflation to increase profits, says the government should impose an “excess profit tax” on oil and gas companies and return the money to Canadians through a GST/HST loan and child benefits.
Leader Jagmeet Singh called Freeland’s approach “absolutely offensive”.
“Soft landing” is still possible
Earlier this week, Freeland met with US Treasury Secretary Janet Yellen, who recently said a recession in the United States is not “inevitable” even though inflation is “unacceptably high.”
Canada still has a path to a “soft landing,” Freeland said, where the country could stabilize the economy after the huge impact of the COVID-19 pandemic without the severe recession that many fear.
Freeland remained upbeat about Canada’s ability to weather global economic uncertainty, especially when compared to other G7 nations.
“The challenge is not over yet, but I truly believe that we will get through this together,” she said.