Federal leaders launch their affordability plans as inflation hits its highest in two decades

The question of who would make life more affordable for Canadians came to the fore on Wednesday with party leaders defending why their spending plans would ease pressures as inflation hits a nearly two-decade high.

On Wednesday morning, Statistics Canada reported that prices increased 4.1 percent in August compared to the same month a year earlier, driven by increased consumer demand and supply chain constraints. supply of many goods.

NDP leader Jagmeet Singh and conservative leader Erin O’Toole were quick to blame the rise in prices on what they called the inaction of liberal leader Justin Trudeau on multiple fronts, including the country’s real estate sector.

Each party’s spending plans could put more pressure on prices and interest rates, and could hurt, rather than help, the pockets of voters, according to a Scotiabank analysis of the platform’s commitments.

The federal government has injected billions of dollars in aid to the hardest hit families, putting a financial floor under them while stimulating demand for goods and services. But the supply of those goods and services has yet to catch up.

Neither party promises to turn off the taps anytime soon even as the economy recovers.

Measures aimed at adding stimulus to household budgets, if enacted, would stimulate more spending, increase demand and further raise prices, Rebekah Young, Scotiabank’s director of fiscal and provincial economics, said Wednesday.

“The platforms will drive spending a little bit more over the next year, precisely at a time when we are already seeing very high inflation,” he said in an interview. “We are all asking that (inflation) be transitory and go down again in the next two years. Certainly, platforms do not make it that easy.”

During a morning stop in Essex, Ontario, Singh said that lowering house prices is one way to address concerns about affordability, arguing that wages have not kept pace with the cost of ownership.

But he stuck to his party’s spending plans that call for $ 214 billion in new social programs like pharmaceutical and dental care to help people affected by the pandemic-induced recession.

“A working class person, a middle class person, when you go through an economic crisis and there is no support, things get even worse,” Singh said.

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“If we don’t invest in people, if we don’t spend on our health care, if we don’t make life more affordable, then they are the ones who will end up paying the price.”

The national median home price is expected to reach $ 680,000 this year, up 20 percent from last year, according to the Canadian Real Estate Association.

Speaking in Halifax, Trudeau said his platform focuses on affordability with important housing and childcare measures.

He argued that O’Toole’s housing plan, which incentivizes investors to pump money into rental housing by modifying rules on capital gains taxes, would not alleviate costs. And the conservative child care plan, Trudeau said, “is a tax exemption that does not create any space” nor does it address affordability issues.

O’Toole pointed to his party’s promises to create more competition in the telecommunications market and to address pricing in supermarket chains as measures to cool price pressures.

The conservative platform records new spending at $ 52.5 billion over the next five years versus $ 78 billion under the liberal platform during the same period. O’Toole argued that his spending would not add to price pressures by signaling his promise to balance the books in the next decade.

“We have a plan to control Mr. Trudeau’s spending. He never wants to have it under control,” O’Toole said.

Speaking in Quebec’s Saguenay region, O’Toole also suggested that he would not open up competition in the country’s supply-managed dairy sector, calling the policy “family-friendly” and “food security.”

The arguments formed the backdrop to the parties’ push to secure the last necessary support before Monday’s vote, in hopes of encouraging their supporters to the polls and attracting voters who are undecided or who might change support. .

A recent poll conducted by Leger in collaboration with The Canadian Press indicated that Liberals and Conservatives were tied with the support of 32 percent of decided voters before the Sept. 20 election, with the NDP at 20 percent.

Trudeau again argued to progressive voters that they could only trust his party to stop the election of a conservative government. Singh responded that Trudeau calls himself a progressive, but has not delivered, using the example of an unfulfilled promise to eliminate fossil fuel subsidies.

O’Toole said his party had disappointed voters in the past, but asked centrists to reconsider voting for the Conservatives, arguing that his party was more progressive than before.

This Canadian Press report was first published on September 15, 2021.


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