Facing a period of sustained inflation that threatens to turn into a recession, Deputy Prime Minister and Finance Minister Chrystia Freeland today tabled her Fall Economic Statement.
Context in which the Fall Economic Statement was presented
Statistics Canada reported in mid-October that the Consumer Price Index rose 6.9 per cent in September year-over-year, essentially the same rate as the previous two months, and that food prices grew by 11.4 per cent, the fastest pace in over 40 years. In response, the Bank of Canada has raised interest rates six times since March 2 and October 25, from 0.5 per cent to 3.75 per cent.
Last week, Minister Freeland outlined the constraints she faced in preparing the update, warning that “difficult days” lie ahead for Canada’s economy, with higher mortgage rates, businesses no longer booming and higher unemployment in the offing. She also frankly acknowledged the dilemma facing the federal government – how to respond to calls for more help to cushion the impacts of the higher cost of living while needing to restrain higher spending to avoid fuelling more inflation: “We cannot compensate every Canadian for all the costs of inflation.”