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Nojoud Al Mallees, The Canadian Press
OTTAWA — The Governor of the Bank of Canada is urging governments seeking to relieve Canadians from the burden of high inflation to choose well-targeted and temporary measures.
At a meeting of the House of Commons Standing Committee on Finance on Wednesday, Conservative MP Adam Chambers asked Governor Tiff Macklem whether it was better to provide direct transfers to low-income Canadians or establish assistance programs energy.
In response, the governor said targeted and temporary measures fuel inflation less than broad-based measures.
“Policies aimed at mitigating the effects of inflation on citizens really need to be targeted at the most vulnerable, and temporary as long as it is an inflation problem,” Governor Macklem said.
The Government of Canada and provincial governments have responded to high inflation with measures to lessen the blow to Canadians’ finances. Some measures have targeted low-income people and others have been generalized.
The federal government recently temporarily doubled the Goods and Services Tax (GST) rebate, a benefit that benefits low- and modest-income Canadians.
Several provinces, including Quebec, have chosen to send checks more widely.
Last Tuesday, Alberta Premier Danielle Smith announced measures that include payments of $600 per child for families earning less than $180,000 a year. The same income threshold and benefit apply to seniors.
Last month, the annual inflation rate was 6.9% in Canada, down from a peak of 8.1% reached in June. Since last March, the Bank of Canada has raised interest rates six times in a row and is expected to announce another hike next month as it aims to cool spending in the economy by increasing the cost of borrowing for Canadians. and businesses.
A major economic slowdown is expected to be on the horizon with higher interest rates. However, many economists predict that even if Canada enters a recession, it will be short-lived.
Bank of Canada governor favors targeted measures against inflation
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