(Ottawa) Saying she wants to set Canadians straight, Finance Minister Chrystia Freeland acknowledges for the first time that the Bank of Canada’s fight against inflation will hit the Canadian economy hard, that the unemployment will increase and companies will see their turnover decline.
Posted at 3:12 p.m.
But to limit the damage, she promises that the Trudeau government will show fiscal discipline and avoid throwing inflationary oil on the fire by unnecessarily increasing spending.
In a speech delivered in Gatineau on Monday, Minister Freeland made it clear, however, that Ottawa will not let down the most vulnerable Canadians, as in the recent adoption of certain targeted measures to help the less fortunate families to face the crisis. cost of living, including doubling the GST credit for six months.
“Even if inflation recedes in the coming months, the situation will remain difficult. Difficult for our friends. For our family. For our neighbors. And for our communities. Our economy will slow down as the central bank has to tackle inflation. Many people will see their mortgage payments increase. Business will no longer be as good as it has been since deconfinement. And the unemployment rate will no longer be at historic lows,” said Minister Freeland.
“That’s what’s going to happen in Canada. This is what will happen in the United States. And that is what is going to happen in economies – large and small – around the world,” she added.
The Minister indicated that she will unveil the measures that the Trudeau government will take to “navigate these troubled waters” during an economic and financial update that she must present to the House of Commons, likely in November.
“The challenges before us for our economy are numerous. This is also the case for the economies of our partners and allies around the world. You don’t have to hide it. Anyone claiming that these challenges can be avoided is misguided. But we will be ready,” said the minister.
“Our social safety net will be there. People contribute all their working lives to employment insurance and pensions. And these programs will be there for them. And we’re making sure Canada has the financial flexibility to support those who need it most – if they need it and when they need it. The next few months will be demanding. It is important that Canadians hear me say it, ”she continued.
Mme Freeland took advantage of her visit to Gazifère in Gatineau to repeat elements of the speech she gave to the Brookings Institution in Washington last week.
In this speech, which resonated not only in the country, but also in several capitals, Mr.me Freeland said democracies must close ranks and carefully distance themselves from authoritarian regimes like Russia and China.
This must be done in particular by proceeding to the construction of a supply chain linking allied countries sharing the same democratic values, a concept dubbed “Friendshoring” by the Secretary of the Treasury of the United States, Janet Yellen.
She also called for speeding up the approval of major energy projects such as liquefied natural gas to supply allied countries such as Germany.
The current global context represents the perfect opportunity to redesign supply chains in a way that no longer depends on authoritarian regimes. According to her, Canada can and must play a leading role in this transition.
“We have the critical minerals and metals needed for the electric cars, cell phones and technologies of today and tomorrow.
We have agricultural production to feed the planet. And we have the fertilizers that farmers around the world need for their crops. […] we have the natural resources to propel the global transition to a green economy. This is the most important economic transition since the industrial revolution,” she argued.