The big news on Wednesday was the announcement from Statistics Canada that the country’s annual inflation rate rose to an 18-year-high last month. This sharp rise beat analysts' forecasts but, more importantly, brought the rising cost of living before a hotly contested election campaign and prompting Justin Trudeau’s opponents to pounce.
But is this fuss by the rival parties warranted and a necessary worry? For the answer to that question and details on how the parties plan on dealing with inflation if elected, checking out what our team of political observers has to say in this morning’s Brief.
From the desk of Geoff Turner, Vice-President
When’s the last time you paid $0.69 for gas? Believe it or not, it was 2020. You would have had to look back to 2002 in StatsCan’s database to see gas below $0.70 a litre. Another not-so-trick question: what’s driving inflation at 4% CPI growth in August, above Bank of Canada’s 1-3% target? Lots of things, but one of them is not “Justin Trudeau’s deficits” (which is not proportionally dissimilar from Erin O’Toole’s proposed deficit track, but no matter).
One of the principal things driving CPI growth is gasoline, specifically the rise in year-over-year prices: two-decade low last year, back to the future this year. This pattern is the clearest way to describe looking at a noted economists’ chart: big price dips as markets reacted to 2020’s COVID recession(s), followed by 2021’s sharp return – just now reaching the baseline plodding along before this. Pressure comes too from housing prices and fixtures - undoubtedly a central issue of this campaign – with plenty of policy firepower from all parties on it. How CPI levels out is an important question now, but the train has not run away.
Not to diminish that life is getting more expensive, especially those hurt most by this crisis are feeling squeezed on all sides. Unfortunately, rather than saving families $1000+ a month in childcare fees, bringing gig workers under EI, or upping seniors’ pensions, Erin O’Toole wields Pierre Poilievre’s inflation conspiracy 2x4 to scare up an attack line.
Lastly, in a $300 billion pandemic, with Ottawa putting up 8 of every 10 dollars supporting people, business and healthcare, O’Toole complains the $600 million cost of the election diminishes this response. Hooey. Besides, the price to maintain democracy and our constitutional order is not something to be scolded or trifled with by a serious national leader, especially as democracies are increasingly facing populists who seem ok to dispense with the whole bother, if they had their way.
From the desk of Neil Brodie, Vice-President
All the polling says that Canadians biggest worry going into the election is affordability.
Inflation is an easy measurement of affordability.
Statistics Canada announced on Wednesday that prices in August were up 4.1%, July prices were up 3.7%, June 3.1%, May 3.6%. You get the idea. Prices are rising while peoples’ wages are stagnating, making life less affordable. It gets even worse when you break down these price rises by commodity. Gasoline up 32% since this time last year, housing up 14%, meat up 7%, retail goods up 6%.
The Liberal policy of the past 18 months of printing money, adding $5 billion per week for almost a year has increased money supply while the supply of goods for purchase has been on a downward slope. This has led to more money chasing fewer goods like houses, cars, and groceries. This policy has given rise to inflation levels not seen in 3 decades. And Mr. Trudeau has not put out a plan to end this cycle. His continued high-spending agenda will lead to higher taxes which will put a drag on the economy and keep wages low.
A Conservative government will put in place a prudent spending plan that will return the country to fiscal balance within 10 years, which will keep taxes low, create jobs and grow the economy.
From the desk of Cameron Holmstrom, Consultant
Canadians have faced many challenges during the COVID pandemic and before it’s over, we’ll surely face more of them. One such challenge has been a rise in inflation, which this week hit 4.1%, the highest-level Canadians have seen since 2003. It’s a serious challenge that deserves serious policy approaches, but unfortunately, on the campaign trail, we’ve seen something very different.
The Conservatives have been beating the drum on inflation, pointing to a legitimate problem while peddling incorrect reasons why that inflation has struck in this way. Pierre Poilievre has been the most vocal on the Blue Team on this topic, attempting to blame much-needed COVID spending for rising inflation. When he’s been corrected on this matter by experts and economists, Poilievre has responded by attacking them instead.
University of Calgary economist Trevor Tombe has repeatedly pointed to the factual reasons for the current state of inflation. On Wednesday he stated on Twitter that “much of the higher inflation we've seen in recent months is in part due to drops during COVID and prices returning to trend today means above-average inflation since last year's levels are lower.” Yes folks, remember how the prices of many things dropped at the start of COVID? They went back up, which created a statistical anomaly that we’re living through now. As Tombe points out, inflation is now back on the same track that it was pre-COVID.
In short, the Conservatives haven’t let facts get in the way of a narrative that they believe will advance their political ends. They have attempted to use inflation as a cudgel to pursue other policy objectives that they wanted to anyway. By trying to sell Canadians a false diagnosis of higher inflation, the Conservatives are showing they aren’t ready to bring a true solution to the rising cost of living.
Liberal leader Justin Trudeau was once again regionally focused, this time in Quebec where he reiterated his party’s plan to build a better future for Quebecers.
While travelling through New Brunswick and Nova Scotia, Conservative leader Erin O’Toole reiterated his party’s policy to help seniors. Click on the tweet below to watch the video.
Speaking in Toronto, NDP Jagmeet Singh recommitted his party’s plan to deal with the housing crisis and help Canadians find a home they can afford.
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Here is where you can expect the leaders to be today (all times are in Eastern):
Justin Trudeau, Leader of the Liberal Party of Canada is in Windsor today and will make an announcement at 9 am.
Erin O’Toole, Leader of the Conservative Party of Canada is in London, Ontario to start off the day where he will make an announcement at 1230 pm. In the evening, he will attend an event with supporters in St. Catharines.
Jagmeet Singh, Leader of the NDP will start the day with an announcement at 945am in Sherbrooke. In the afternoon, he will visit supporters in Sackville, Nova Scotia and Halifax.
Annamie Paul, Leader of the Green Party of Canada did not release her details yet.
Yves Blanchet, Leader of the Bloc Quebecois will speak with media at 10 am on Muskrat Falls and the GST at a power plant in Saint-Étienne-des-Grès. and then in the afternoon, he will hold a press conference at the Davie shipyard in Lévis.
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