As It Happens6:38 a.mJagmeet Singh says raising the rate is not going to lower it
The NDP leader questions the Bank of Canada’s decision-making and calls on the governing Liberals to do more to curb the rising cost of living.
The Bank of Canada announced Wednesday that it will raise its benchmark interest rate by 50 basis points to 3.75 percent in an effort to curb rising inflation by encouraging Canadians to spend and borrow less.
This rate is the amount charged to retail banks for short-term loans, but it filters down into the economy by affecting the interest rates Canadians receive from their own lenders, such as savings accounts and mortgages.
Earlier this week, Jagmeet Singh said that the central bank’s approach to fight inflation is of no use. According to the Toronto Starhe also wrote a letter to Prime Minister Justin Trudeau urging the Liberal government to do more to address rising food and energy costs.
Here is part of his conversation As It Happens hosted by Nil Köksal.
When we look at other countries and compare Canada to them, Canada has managed to keep inflation in the single digits [and] even reducing it by a percentage from June. So what makes you question the Bank of Canada’s decision-making here?
First, we know that this really steep, dramatic increase in interest rates is causing a lot of pain… for a lot of families. They look at their mortgages and wonder if they can afford to keep their home. So that’s a big concern.
Another factor is that many economists point out that this short and sharp rapid increase in interest rates in such a short period of time is very likely to trigger a recession. And that means the loss of potentially hundreds of thousands of jobs in our country.
The Bank of Canada is independent, but its mandate is set by the Government of Canada. And that’s why we’re calling on liberals to take a more sane approach to this problem. They can’t just sit back and let the Bank of Canada be the only answer to inflation. The Liberal government has its own role.
You said earlier this week that there is “no evidence” for rate hikes like the one we have seen today [and] “There is no merit” in that approach… It was very troubling that you made such strong statements because the independence of the bank, as you mentioned, but also because it is … an economic approach that works… Do you stand by the argument , that there is no evidence for the Bank of Canada rate hikes?
I have to accept and admit that the rise in interest rates has definitely reduced housing somewhat. There has been pressure on the apartment. So I admit it.
But the other factors that really affect people’s lifestyles, the cost-of-living pressures that people experience—gasoline, energy costs, food prices—none of these things really affect. directly by raising interest rates.
Of course, the Bank of Canada doesn’t control things, including food prices, as you mentioned. What would you and the NDP government possibly do to lower inflation or lower the cost of the things you just listed?
That’s why… we have called for a study on food prices. And we have actually forced all parties to accept our plan, which is a food price inquiry at a parliamentary level.
We asked the competition agency to also look into possible price fixing, given the high profits of grocery stores in the business sector. There are CEO bonuses, and … employees don’t get paid more. Producers don’t get paid more. But the profits will surely increase.
We provide real solutions to solve problems. And we say the Liberal government needs to do more.
SEE | How do interest payments affect you?
The Prime Minister pointed out earlier today in uncertain times what his government has been doing – targeted aid, as he said, GST credit news we received recently, [and] also dental care. They say they are doing what they can right now.
Each of these measures are things we fought for and got the government to do. So, of course, we’re proud of the work we’ve done to make dental happen after the Liberal government voted against it twice over a year ago.
Every measure that is happening right now is a direct result of the New Democrats. We say the Liberal government needs to do more to get help and a plan for Canadians worried about the future.
You have the ability to stop supporting this minority government. And if you feel the Liberals are leading us into recession why are you supporting this government?
We always have the option to withdraw our support and we are aware of that. And we understand how powerful that tool is and also the danger – that it would plunge into the country’s elections.
But our focus has been more: How do we force this government to do what is needed? And I refer to the example that the new Democratic Party has now pushed a legislative agenda. Dental subsidies, rental subsidies and the GST discount, the three big parts that the government refers to, are all specifically and solely ours. We are forcing the government to do these three things.
And that’s why we want to continue to use our leverage to provide assistance to Canadians. We are not involved in the self-serving purpose of starting elections when it is politically convenient for us. We want to make sure that we make the right decision for the country and the people. And starting elections right now would be a very serious decision to make. And we wouldn’t do it if there was no other way.
We have heard from the Conservative leader Pierre Polievre said he would shoot [Bank of Canada governor] Tiff Mackle. Are you concerned about these kinds of statements and what they are saying to Canadians?
I agree with the concerns expressed by Canadians about the removal of the Governor of the Bank of Canada. It clearly undermines the institution’s independence to go in and separate the head. It is wrong.
But making sure that the Canadian government sets the appropriate mandates for the Bank of Canada is something politicians and political leaders should definitely do.
The decisions they make are decisions we should be able to criticize and question, and the fact that their approach to inflation does not address the main causes of inflation, the war in Ukraine. [or] supply chain problems that have led to inflation.
These are legitimate concerns and criticisms that should be raised, and I think it is appropriate to raise them.
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