TORONTO-Amid stubbornly hot inflation and rising interest rates, Finance Minister Chrystia Freeland detailed financial commitments to “help make life more affordable for millions of Canadians’,’ but the measures were all previously announced.
Freeland delivered a keynote address about the state of the Canadian economy at the Empire Club of Canada in downtown Toronto Thursday afternoon.
In her speech, Freeland highlighted the federal government’s ‘Affordability Plan,’ which she referred to as a suite of measures totalling $8.9 billion in new support for Canadians in 2022.
The measures were all included in the past two federal budgets and are now taking effect.
Freeland called recent skyrocketing inflation a “global phenomenon” that is being driven by lasting impacts of the COVID-19 pandemic, ongoing lockdowns in China and Russia’s invasion of Ukraine.
“Jobs are plentiful and business is booming, but it is also harder for a lot of Canadians to pay their bills at the end of the month,” Freeland said in her speech.
Last month, Statistics Canada reported the inflation rate for April rose 6.8 per cent compared with a year ago. That’s the highest since January 1991. The federal agency is expected to release May’s inflation report next week.
Ahead of Freeland’s speech, Canada’s unions called on the finance minister to announce new measures “to make sure millions of vulnerable workers and their families aren’t left behind by the worsening inflation crisis.”
“It’s the responsibility of governments to intervene and make sure families are not being left to bear this burden alone,” Bea Bruske, president of the Canadian Labour Congress, said in a news release Thursday morning.
“Beyond measures already announced in Budget 2022, additional direct and targeted help to families through an immediate increase in the GST credit would help vulnerable families who need it the most.”
The U.S. Federal Reserve hiked its key interest rate by three-quarters of a percentage point on Wednesday _ its largest hike since 1994, leading economists to predict the Bank of Canada will follow suit next month.
Canada’s central bank has increased its key rate by half a percentage point twice in recent months, bringing it to 1.5 per cent in June and governor Tiff Macklem has hinted he is prepared to act “more forcefully” if high inflation persists.
This report by The Canadian Press was first published June 16, 2022.