The federal cabinet will discuss this week whether new federal measures are needed to help Canadians with the cost of living, Finance Minister Chrystia Freeland said after the Bank of Canada announced a 0.75-per-cent rate hike aimed at dampening inflation.
The Finance Minister, who is also Deputy Prime Minister, made the comment to reporters Wednesday on her way into a cabinet meeting in Vancouver, where ministers are holding a closed-door retreat that wraps up on Thursday.
Some provinces, including Saskatchewan and Quebec, have issued direct payments to individuals as an inflation-relief policy, while other provinces, including Ontario and Alberta, approved temporary cuts to the provincial gas tax.
Ms. Freeland was asked if she is ruling out new federal measures to support consumers.
“I didn’t say that,” she said. “I said that we are constantly looking. We’re going to continue to do that. I think that’s going to be a very important subject of our discussions today and tomorrow.”
Federal documents disclosed online show the finance department has had internal discussions over the summer about an economic and fiscal update for 2022, as well as next year’s federal budget.
The government’s April budget projected a $52.8-billion deficit for the current fiscal year, followed by a $39.9-billion deficit in 2023 to 2024. However, early signs suggest this year’s federal deficit will likely be significantly smaller than that forecast. Monthly-tracking reports covering the first quarter of the current fiscal year showed a $10.2-billion surplus over that period, compared to a reported deficit of $36.5-billion during the same three months a year earlier.
The minister repeated past comments that the federal government is helping to curb inflation by acting in a fiscally responsible way. She declined to comment specifically on the Bank of Canada’s rate hike, noting that the bank makes its decisions independently of government.
“I recognize the independence of the Bank of Canada as one of the fundamental institutional pillars in Canada, and I am not going to jeopardize that,” she said.
Ms. Freeland did not provide examples of the types of measures that cabinet may be considering. When asked in June about a potential gas tax cut, the minister did not rule that out. However she said then, and repeated Wednesday, the government’s focus is on supporting “the most vulnerable” in society.
The Conservative Party has been calling for cost-of-living relief measures such as suspending the GST on gasoline and diesel.
Conservative finance critic Dan Albas said in a statement Wednesday that the latest rate hike is the result of “out-of-control spending” that contributed to inflation.
“Unfortunately, the Liberals and their NDP allies have rejected Conservative proposals to reduce inflationary pressure by getting their reckless government spending under control,” said Mr. Albas.
NDP Leader Jagmeet Singh blamed inflation on “corporate greed” and called on the government to bring in an excess profits tax. He said this could pay for cost-of-living support such as increasing the GST credit for low-income Canadians, increasing the Canada Child Benefit and boosting rent support through the Canada Housing Benefit.
Mr. Singh said the government must act in response to inflation.
“If the only response to that is the Bank of Canada increasing interest rates, all that’s going to happen is workers are going to suffer,” he told reporters at a caucus retreat in Halifax.
Ms. Freeland was also asked about a report this week by parliament hill journalist Paul Wells, who wrote that sources say she is being mentioned as a serious candidate to become NATO’s next secretary-general.
“I have a really big job already. In fact, I have two big jobs as Finance Minister and Deputy Prime Minister of Canada,” she replied. “And I am really, really focused on those.”
Another major decision facing the cabinet is the future direction of federal health spending. The provincial and territorial premiers are seeking major increases above the status-quo in the Canada Health Transfer.
The Liberal government has also promised the federal NDP that it would fund the initial stages of a national dental care program before the end of the year.
Recent public opinion polls show Canadians give the health system a failing grade.
Health Minister Jean-Yves Duclos, who is also attending the cabinet retreat, said his government has heard about the issue for many months.
“The health care system is in crisis because we have a crisis of health care workers. It’s all about human resources,” he told reporters Wednesday. “That’s why we’re investing in and supporting provinces and territories in addressing that crisis. It’s key to the long-term sustainability of our health care system.”
Asked about provinces’ calls for more federal funding for health care, Mr. Duclos said within the squabbling lies “a futile fight and a useful debate.”
“The futile fight is about the percentages,” he said, repeating his view that the premiers’ call for Ottawa to fund 35 per cent of health care costs ignores a 1977 arrangement that saw Ottawa surrender tax room to the provinces.
“What is useful is a useful fight for health care workers,” Mr. Duclos said. “We need to support our health care workers, to recruit more of them, to recognize their credentials, to retain them. ... Supporting them in ways that they need for them to then care for health care patients that are in dire need of supports.”
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