The Governor of the Bank of Canada said that Trudeau’s out-of-control spending is a key factor that’s keeping inflation high and that mass immigration has resulted in skyrocketing rent prices.
“Last time I was here, I think I said government spending on goods and services was forecast to grow at about two and a quarter. That has now moved up to two and three quarters. That is somewhat above two per cent, so, yeah, that is not helpful in trying to get inflation down,” Tiff Macklem told the House of Commons finance committee.
Despite the Trudeau government’s best efforts, however, Macklem says inflation will start to slow down, and the Bank of Canada will soon be able to reduce interest rates without devaluing the Canadian dollar, which will come as a relief to homeowners, both prospective and current. However, he says that this will be by no means rapid and that high prices are essentially the new normal.
“Interest rates are certainly not going to the emergency low levels we had during COVID. They’re unlikely to even get back to the pre-COVID levels,” Macklem said. “… it’s likely to be a pretty gradual path.”
“Canadians should not be expecting a rapid decline in interest rates.”
Speaking to the Senate yesterday, Macklem also stated that the number one contributor to inflation remains housing, which has been heavily exacerbated by Trudeau’s radical immigration policies.
“Shelter cost inflation is still very high, and remains the biggest contributor to overall inflation,” he said. On the question of immigration, Macklem said, “A critical choke point is housing,” adding that the market was ”already very tight“ and not ”sufficiently flexible to adapt to this rapid rise in immigration. So you’re seeing rent price inflation, running at about 8 per cent. That’s impacting a lot of people.”
