Rate jumps did not take into account their drastic impact on consumers, says Eby
The Bank of Canada’s stated purpose in its rate-hike campaign was to rein in runaway inflation, but British Columbia premier David Eby argues that the central bank failed to consider the “human impact” of the rate increases.
Writing to BoC governor Tiff Macklem, Eby said that the rates had a drastic impact on Canadian consumers, who are already labouring under ever-mounting costs and debt levels.
“While the role of the Bank of Canada is to make decisions about monetary policy, my role as premier is to stand up for people in BC and ensure their voices are heard as decisions are made that impact them,” Eby wrote, as reported by The Canadian Press.
Eby said that the BoC’s 10 rate hikes since March 2022, which pushed the benchmark lending rate to a 22-year high of 5%, represent a significant contributor to Canadian inflation.
“A rate increase in September is more likely than not to lead to higher mortgage rates again, directly causing further inflation,” Eby wrote.
“In your role as governor, I urge you to consider the full human impact of rate increases and not further increase rates at this time.”
Despite avoiding a crash, signs indicate aggressive rate hikes by the Bank of Canada and the Federal Reserve are impacting economic strength.
— Canadian Mortgage Professional Magazine (@CMPmagazine) August 28, 2023
Read more: https://t.co/3bmB6MxCc1#mortgageindustry #ratehike #interestrates #economy
Eby urges Trudeau to implement targeted approach to inflation
The BC premier also called on Prime Minister Justin Trudeau to mount a more focused strategy in dealing with inflation, with particular attention towards housing and infrastructure policy.
Eby argued that focusing on these sectors will come with “long-term anti-inflationary benefits” as they will boost economic growth through improved productivity.
“There are other ways for us to achieve cost stability, but they do require diligence and co-ordination,” Eby wrote to Trudeau.
“The time is overdue for such an effort. Ahead of September’s rate decisions, I suggest a robust and targeted approach focused on the largest contributors to inflation.”
