Cost-of-living concerns must be balanced with budget cuts, says Chrystia Freeland

Finance Minister Chrystia Freeland says she must strike a balance between helping Canadians suffering from the effects of inflation and pursuing a policy of fiscal restraint – or risk making the cost of living worse.

In an interview broadcast Sunday on Rosemary Barton liveFreeland, who is also deputy prime minister, said she was open to further action on affordability issues, but believed the measures already underway – worth $8.9 billion dollars – would help mitigate the impact on Canadians.

“I have to strike a balance. One is supporting Canadians who are struggling with affordability and the other is fiscal restraint, because I don’t want to make the Bank of Canada’s job harder than it needs to be.” already is,” Freeland told CBC’s chief political correspondent, Rosemary Barton. .

The Bank of Canada is mandated to maintain Canada’s inflation target of 2% (within a range of 1-3%) per year. Freeland said it was the bank’s responsibility to deal with inflation and that it respected its independence.

In a speech earlier this month, she argued that previously announced programs — including increased benefits for low-income workers, increases to other inflation-indexed benefits, and implementation of government childcare and dental care programs – would help address affordability issues.

Freeland reiterated that view in the interview that aired Sunday, saying the money from those programs was already on its way to Canadians.

“It’s normal to be angry”

The Minister of Finance acknowledged the frustration felt by many Canadians with rising prices, particularly for key consumer goods. She said friends sent her pictures of pump prices and she was aware that groceries were more expensive.

“And for a lot of Canadians, that causes real hardship. I really understand that,” she said.

Asked about the general unease many Canadians feel about the economy, Freeland struck a similar tone.

WATCH | MPs discuss how the government could act to manage inflation:

MPs debate tools to tackle soaring cost of living

Peter Fragiskatos, Parliamentary Secretary to the Minister of National Revenue, and Dan Albas, Conservative Finance Critic, joined Power & Politics on Wednesday to discuss the soaring cost of living and what Ottawa can do to relieve Canadians.

“I say it’s okay to be angry,” she said. “It’s okay to be mad at me. I really understand that these are incredibly tough economic times. It’s really, really tough for a lot of people.”

The federal government has come under fire over inflation from opposition Conservatives and New Democrats. The Liberals have a supply and confidence agreement with the NDP to keep the minority government afloat on key votes.

Opposition to attack

In response to Freeland’s speech, Tory MPs Dan Albas and Gerard Deltell issued a statement criticizing what they call the government’s “tax and spend” strategy.

“This flawed economic approach eats away at the incomes of hard-working Canadians and ignores the most fundamental economic principle: that spending during an inflationary crisis will only fuel inflation further. Yet the Liberals continue down this path with reckless abandon, inflicting more inflationary pain on Canadians.

NDP, which argues that corporations take advantage of inflation to increase profits, says the government should impose an ‘excess profit tax’ on oil and gas companies and give money back to Canadians through credit for the GST/HST and the child benefit.

Chief Jagmeet Singh called Freeland’s approach “absolutely insulting”.

“Soft landing” still possible

Freeland met earlier this week with US Treasury Secretary Janet Yellen, who recently said a US recession is not “inevitable”, although inflation is “unacceptably high”.

Canada still has a path to a “soft landing,” Freeland said, where the country could stabilize economically after the huge hit of the COVID-19 pandemic without the severe recession feared by many.

WATCH | Finance Minister and US Treasury Secretary discuss economic conditions:

Freeland and Yellen discuss inflation and affordability plans

Finance Minister Chrystia Freeland and her U.S. counterpart Janet Yellen discussed rising inflation and various affordability measures, though Freeland maintains Canada does not have federal tax exemptions on fuels to break with record gasoline prices.

Freeland maintained an optimistic tone about Canada’s ability to weather global economic uncertainty, especially relative to other G7 countries.

“The challenge isn’t over, but I truly believe we’ll get through this together,” she said.

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