History tells us that the Bank of Canada has a 0% success rate in fighting inflation by quickly raising interest rates. If a pilot told me that they’d only ever attempted a particular landing three times in the past 60 years with a 0% success rate, that’s not a plane I’d want to be on. Unfortunately, that looks likes the plane all Canadians are on now.
Throughout the pandemic, many small- and medium-sized businesses have weathered the storm, thanks to federal government help. In his deputation to Canada's federal Industry Committee, David Macdonald says it's time to give those businesses an "off-ramp".
This isn’t a workers’ wage-led recovery; in fact, inflation is eating into workers’ wages, diminishing their ability to recover from the pandemic recession. Corporate profits are capturing more economic growth than in any previous recession recovery period over the past 50 years.
Twenty-six per cent of higher inflation for Canadian households is being driven by excess profits
Prepared remarks to the House of Commons finance committee's study on inflation
Tackling inflation can be part of a public-led recovery—it only requires government to reduce or maintain prices in areas they control.
Despite the likely transitory nature of this inflation, many of the poorest Canadians won’t be protected.
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