The Conservatives and the NDP pressure the Liberal government to take more measures against inflation

Opposition federal parties are pressing the government to do more to curb inflation before Parliament adjourns for the summer, though there is considerable disagreement over whether to tackle cost-of-living challenges by cutting or raising taxes and redistributing income. .

On Tuesday, the Conservatives used their last day of opposition before the summer break to table a motion calling on the government to freeze the goods and services tax on petrol and diesel, suspend the carbon tax and lift tariffs on fertilizer imports, among other requests.

“People don’t need a check from the government. They need a tax cut,” caretaker Conservative Leader Candice Bergen said at a news conference Tuesday ahead of debate on the motion. “The best way to provide relief to Canadians is to reduce their taxes, not to promise them that a check might come in the mail.”

The motion was scheduled for a vote Tuesday night. The Liberals and the NDP, who vote together have a majority in the House of Commons, spoke out against the Conservative proposal.

The NDP, meanwhile, reiterated its own proposal to address affordability by taxing “excess profits” that large businesses have made during the COVID-19 pandemic and redistributing income to low-income families through increases in credit. GST and the Canadian child benefit.

The sharp increase in consumer prices, particularly for essential items such as food, gasoline and housing, has become a major political issue. Opposition parties have spent much of the past two parliamentary sessions egging the government on inflation, which hit an annual rate of 6.8%, the highest in three decades, in April.

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So far, opposition proposals to address it have made little headway.

Liberals have downplayed attempts to blame them for rising prices, arguing that inflation is a global phenomenon caused by pandemic-related disruptions to supply chains and, more recently, a shock to commodity prices. raw materials due to the Russian invasion of Ukraine.

Liberal ministers have also pointed to initiatives such as subsidized childcare and an expansion of the Canada Workers Benefit, which goes to low-income people, to argue that the government has been proactive on cost-of-living issues.

At the same time, the government has taken fewer steps to deal with price increases or offset rising costs than those in other advanced economies.

In March, US President Joe Biden ordered the release of strategic oil reserves. That’s putting an additional million barrels of oil on the market every day for six months.

Mr. Biden has said that controlling inflation is his economic priority, and in recent months he has emphasized the importance of reducing the size of the US federal government deficit as a means of achieving this. The Democratic administration is under considerable pressure to show that it is serious about reining in inflation ahead of midterm congressional elections in the fall.

Germany’s ruling coalition announced a 16 billion euro ($21.5 billion) inflation relief package in March that includes measures such as cutting gas tax for three months by about 30 eurocents per litre.

European countries are facing a heavy inflationary shock as sanctions against Russia have affected much of their oil and gas supply.

Asked in question period Tuesday why the Canadian government wasn’t doing more to address rising fuel prices, Natural Resources Minister Jonathan Wilkinson said the government was working with allies to stabilize international energy markets.

“In that sense, we have committed to increasing oil and gas production by 300,000 barrels per day by the end of the year. At home, we have instructed the Competition Bureau to make sure there is no collusion around the price of gas,” Mr Wilkinson said.

The UK Conservative government has introduced a “windfall tax” on energy company profits similar to what the NDP has proposed.

From the end of May, energy companies operating in Britain face an additional 25 percent tax on profits, although exemptions are in place to encourage things like increased investment. The UK government plans to direct these funds towards initiatives aimed at alleviating cost of living challenges.

Canada’s Liberal government raised taxes on excess profits from banking and insurance companies in its April budget. This included a 1.5 percent increase in corporate income tax on profits over $100 million, as well as a one-time 15 percent tax on income from banks and insurance companies over $1 billion for 2021.

NDP leader Jagmeet Singh said Tuesday that the government should expand this initiative by taxing other large companies experiencing windfall profits, “particularly big box stores and oil and gas companies.”

It is the government’s responsibility to say: “If you are making excessive profits at the expense of people at a difficult time when people cannot afford to eat, then you should start paying your fair share,” said Mr Singh. at a press conference.

The main responsibility for controlling inflation rests with the Bank of Canada, which has begun aggressively raising interest rates to try to slow the economy and realign demand and supply. The central bank raised its policy interest rate in three consecutive rate decision meetings, to 1.5 percent, and said it may need to raise the benchmark rate to 3 percent or higher.

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