Last month, the Liberals released their Fall Economic Statement, the latest chance for them to reign in spending, balance the budget, and start bringing down inflation and interest rates. Instead, it increased government spending by $20 billion, resulting in prices, rates, taxes, and debt going up.
This will keep inflation and interest rates higher than Canadians can afford. Additionally, Trudeau proposed increasing taxes on the backs of the middle-class, including forging ahead on quadrupling the carbon tax.
The Bank of Canada Governor, Tiff Macklem, has said interest rates cannot drop significantly until inflation is under control. He also said the BoC’s efforts to control inflation by raising interest rates are at odds with the projected pace of government spending, and urged the government to consider the “inflationary impact” of their spending decisions when making up their budgets.
Just recently Scotiabank has done a study showing that interest rates could drop significantly without inflated government spending. The bank’s Global Economics division has estimated that two percentage points (or 200 basis points) of the Bank of Canada’s current five per cent rate are down to recent spending.
Had spending not exceeded normal levels, the Bank’s rate would now be three per cent, according to the study. “There is no question in our minds that fiscal policy has complicated the task of monetary policy in Canada,” the report’s authors explained.
Despite this, the Prime Minister continues to ignore all calls for moderation and is keeping inflation and interest rates high. This fall, Conservatives, led by Pierre Poilievre, put forward a motion calling on the government to introduce a clear plan and timetable to balance the budget.
This should have been a non-partisan issue, since the Liberal Finance Minster promised to return to balanced budgets prior to tabling last year’s budget… before returning with $60 billion in NEW spending. But just like then, the Liberals and NDP ignored our warnings and voted to block our motion.
These interest rates risk a mortgage meltdown on the $900 billion of mortgages that will renew over the next three years.
Trudeau has added more debt than all other Prime Ministers combined and has no plan to get inflation under control, which is driving up the cost of the goods we buy and the interest we pay.
The only way to undo the damage the Liberals have done is by reversing course and doing the opposite. After 8 years, only common sense Conservatives will bring home powerful paycheques, lower prices and lower interest rates that Canadians need.