The message from the Governor of the Bank of Canada, Tiff Macklem, was very clear on Thursday to the elected representatives of the Finance Committee in the House of Commons. If Canadians want interest rate cuts, governments are going to have to stop spending.
Mr. Macklem is counting on governments to help him keep inflation at 2%: “If real public spending at all levels of government increases significantly above 2%, then it will be difficult to bring inflation back down to 2%. inflation at 2%. »
Problems on the horizon
We can wonder if the Trudeau government will carry out the message from the Governor of the Bank of Canada. This government has not accustomed us to very tight spending controls.
Above all, currently, with the marriage with the NDP, the Liberals have committed to spending on very expensive programs like dental insurance. With at least fifteen points behind in the polls, Justin Trudeau cannot allow himself to lose the support of Jagmeet Singh.
But, as the NDP also says it is concerned about Canadians’ wallets, will the left party be ready to reduce its demands so that the federal government does not spend too much? We can dream in colors…
But the federal government and the provinces will have to stop adding fuel to the fire if we do not want to have interest rates so high for several more years.
Gift for Poilievre?
Tiff Macklem’s statements in front of elected officials are like music to the ears of Pierre Poilievre.
This adds fuel to his argument about budgetary rigor. Thus, one can wonder if Mr. Poilievre will not ultimately keep Mr. Macklem if he becomes Prime Minister.
However, the Conservative leader will have to tell us where his savings will be. An attack that Justin Trudeau will use regularly.
On the other hand, if Justin Trudeau is serious about wanting to help Canadians, he will also have to tell us where he will cut so that the key rate returns to normal.