OTTAWA––Canada’s unions reacted with disappointment to the Bank of Canada’s decision today to rush ahead with the seventh interest rate hike this year.

“Economists have urged the Bank of Canada to let the impact of previous rate hikes take hold before taking further action that could risk causing a damaging recession. It’s regrettable the Bank of Canada rejected that advice,” said Bea Bruske, President of the Canadian Labour Congress. “Moving ahead on another rate hike today could mean hundreds of thousands of workers losing their jobs and families losing their homes. There is a better way.”

Canada’s unions, alongside several prominent economists, have been urging Bank of Canada Governor Tiff Macklem to take a pause on further rate hikes until the effects of previous hikes could be determined. Canada’s unions have criticized the Bank’s ongoing warnings about wage growth driving inflation, while saying little about how corporate Canada’s pricing power has been fueling higher prices.

“Central banks raise rates to cool the economy and lower inflation. But the Bank of Canada has gone further and has waged a public relations campaign warning about the phantom menace of higher wages,” continued Bruske. “There is simply no evidence of this. Real wages are down more than 5% over the past two years and continue to lag behind inflation. Meanwhile, corporate profits have ballooned to record levels. It is time for a more balanced policy approach.”

Bruske added that the government also has a role to play in helping families through this cost-of-living crisis, in particular if the Bank’s monetary policy ends up pushing Canada into a recession. This should start with fixing EI and action to address the problem of concentrated corporate power allowing companies to raise prices as much as they can get away with.

“The government should take action against price gouging, including an excess profits tax that makes profiteering corporations pay their fair share. We can then invest these revenues in targeted help to those struggling just to get by and improvements to our broken Employment Insurance system,” concluded Bruske. “At this critical moment, Canadians are looking to policy makers in government, at the Bank of Canada, and in corporate boardrooms across the country to make decisions that put the wellbeing of everyday people first.”

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You can read Bea Bruske’s full opinion editorial on the actions of the Bank of Canada here: https://canadianlabour.ca/bea-bruske-bank-of-canada-should-pause-rate-hikes-now-to-avert-a-manufactured-recession/

To arrange an interview, please contact:
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media@clcctc.ca
613-526-7426

The post Missed opportunity to push pause on rate hikes and put people first appeared first on Canadian Labour Congress.

OTTAWA –– Canada’s inflation rate held at 6.9 per cent in October, despite the Bank of Canada’s aggressive interest rate increases, while workers across Canada continue to see their cost of living rise. 

“To have the Bank of Canada Governor tell workers that unemployment needs to rise in the name of slowing inflation when these interest rate increases aren’t doing what he says they will, is a step too far,” said Bea Bruske, President of the Canadian Labour Congress. ‘’Big corporations are cashing in all-time high profits while Canadians face the worst food retail inflation in four decades with grocery prices jumping 11.4 per cent.’’ 

In a risk scenario released by the Parliament Budget Officer on November 9, modelling shows that increasing interest rates may not move inflation for years. The Bank of Canada’s single-minded pursuit of the inflation target is not the only way, we have proof of that today. It doesn’t make sense to rely on decades-old monetary policy to solve today’s economic challenges.

Since inflation first broke through the Bank of Canada in March 2021, the average hourly wages have continuously lagged behind price inflation. Adding to this is the increasing inequality between workers and corporations, affecting the most vulnerable. Corporate profits have reached their highest-ever share of GDP while workers’ share has systematically decreased.

Canada’s unions are urging Parliament to act now and to make profiteering corporations pay their fair share – and invest that money in helping struggling families. We need investments in programs like pharmacare, child care and long-term care, to alleviate some of the costs families face, ultimately helping reduce the impacts of inflation.

“People in Canada need the government to address the real causes of inflation and offer fiscal, labour market and social policy measures that will blunt the impact on vulnerable families,” said Bruske. “Workers drive this economy, we need to put the wellbeing of people at the centre of any policy planning and we need tax reform to ensure these big businesses are paying their fair share.” 

A report released by the Canadian Labour Congress and Centre for Future Work proposed policy alternatives to rate hikes, policies that put people at the heart of Canada’s monetary and fiscal policies. The report also explains the shortcomings of old-school economic theories, outlines the real impact of a recession on people and proposes. A copy of the report can be downloaded here.

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To arrange an interview, please contact:
CLC Media Relations
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613-526-7426

The post Bank of Canada’s continuous rate hike is not slowing down inflation appeared first on Canadian Labour Congress.

OTTAWA –– Today’s decision by the Bank of Canada to further raise interest rates will have devastating effects on the working people who drive our economy. 

“With corporate profits at an all-time high, workers and their families are still being forced to bear the burden of the Bank’s singular focus on driving down inflation with aggressive rate hikes,” said Bea Bruske, President of the Canadian Labour Congress. “The Bank of Canada is determined to push the economy into a recession, no matter the impact on individual Canadians who could lose their jobs, their homes and their quality of life.”

Rising interest rates make debt more expensive at a time when workers across the country are struggling from paycheque to paycheque. An unnecessary recession would hit precarious and low-wage workers, in particular women, Indigenous, racialized, and recent immigrant workers the hardest. 

“Our economy is powered by workers. Without them contributing to the economy, this country will be in dire straits,” said Bruske. “We need an open and transparent discussion of our country’s monetary policy, the best ways to fight inflation avoiding a recession – without causing widespread harm to workers and families

A report released last week by the Canadian Labour Congress and Centre for Future Work proposed policy alternatives to rate hikes. The report explains the shortcomings of the Bank of Canada’s interest rate hikes and explores the economic costs of a recession. 

The report also demonstrates the increasing inequality between workers and corporations. Business profits have reached their highest-ever share of GDP while workers’ share of GDP has decreased since 2019. 

“Governments cannot continue to stand by while workers are asked to pay the price of an inflation crisis they did not create, while their share of national income has fallen drastically,” said Bruske.

Canada’s unions are calling on the Bank of Canada to pause interest rate hikes until the impact of previous policy interventions is clear. In addition, all levels of government must take measures to address and ameliorate the true causes of current inflation, protect Canadians against its effects, and safeguard jobs and incomes.

A copy of the report can be downloaded here. 

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CLC Media Relations
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613-526-7426

The post Bank of Canada determined to push the economy into a recession, no matter the impact on Canadians appeared first on Canadian Labour Congress.

“Conservatives keep pushing the same playbook, time and time again. You can’t solve today’s crisis with policy from the inflation struggles of the 1990’s,” said Bruske. “Rate hikes, austerity policies and government cuts to services families rely on is not going to solve supply chain disruptions or the aftereffects of the pandemic economic slowdown.”

Higher interest rates and lower investment in people won’t help lower energy prices or bring down the costs of groceries, two of the biggest drivers of today’s inflation numbers.

“Conservative economists and right-wing columnists are suffering from magical thinking,” said Bruske. “You can’t keep a steady drumbeat of tightening credit and cutting help for people without slowing an already uneven recovery, generating insolvencies, and above all, raising workers’ level of insecurity.”

Immediate relief for families can be achieved through quick action on affordable housing, child care and pharmacare to bring drug costs down.

“On a day when Loblaws beat expectations and reported even higher profits it baffles me why Canada is still dragging its heels on a wealth tax to make pandemic profiteers pay their fair share,” concluded Bruske. “Now more than ever we need a strong social safety net and investments in the programs so many Canadians depend on, including universal child care, pharmacare, affordable housing and job-training programs to help workers transition to low-carbon and green jobs.”

To arrange an interview, please contact:
CLC Media Relations
media@clcctc.ca
613-526-7426

The post Conservatives pushing the same playbook on inflation instead of helping families appeared first on Canadian Labour Congress.