Liberal Cabinet Retreat Focusing on Cost-of-Living and Inflation Issues, Says Minister Leblanc

Minister of Intergovernmental Affairs, Infrastructure, and Communities Dominic LeBlanc arrives on Parliament Hill for a meeting of the federal cabinet, in Ottawa, on June 21, 2022. Justin Tang/The Canadian Press

The Liberal cabinet is holding a retreat this week in Vancouver ahead of the fall parliamentary session and Minister of Intergovernmental Affairs Dominic Leblanc said on Sept. 6 that the focus will be the economy.

“We’ve obviously heard in every part of the country the importance of working on economic measures that speak to affordability issues, that speak to things as important as the cost of housing, as dealing with a global phenomenon of inflation,” said Leblanc in a press conference.

Leblanc was asked by reporters what his government plans to do to address the issue of inflation that is hitting some Canadians hard, particularly in light of the federal Conservative Party deciding its new leader on Sept. 10. Presumed frontrunner Pierre Poilievre has focused on inflation and affordability issues during his campaign and in his previous role as finance critic.

“We’re not here to spend a lot of time worrying about who the Conservative Party will choose as their next leader,” said Leblanc.

He mentioned childcare agreements with provinces and territories and increasing the Canada Child Benefits as measures his government has taken to date to alleviate the cost of living.

Prime Minister Justin Trudeau said last week that the government must be “careful” not to fuel the country’s spiking inflation rates as it moves to dampen the crisis.

“We’re going to continue to do what is necessary to support vulnerable Canadians as we move forward, taking into account inflation, but also being careful not to do things that will accelerate or exacerbate the inflation crisis we’re facing,” he said on Aug. 31.

When asked by reporters why the Liberal government had no new initiatives in recent months to combat the escalating cost of living, Tourism Minister Randy Boissonnault, who spoke alongside Leblanc, defended the government’s efforts.

“I’m going to push back a little bit on saying there’s ‘nothing new’ in the window,” Boissonnault said.

“Since budget [2022], $8.9 billion dollars in our affordability plan. We’re talking about a 10 percent increase in OAS [Old Age Security], we’re talking about a $500 credit for people struggling with housing, we’re also talking about indexation of all of our benefits.”

Boissonnault said the government would “have the backs of Canadians” through the inflation period like it did during the pandemic, in which he said Ottawa spent $511 billion in support to various sectors.

Pandemic Policy

Government spending on relief programs during the pandemic has been credited by some economists as creating the current inflationary bout.

“Many advanced economies have inflation rates similar to ours, not because it’s inevitable, but because they did similar things in reacting to the pandemic. Choices about monetary policy and fiscal policy got us here,” said William B.P. Robson, president and CEO of the C.D. Howe Institute think tank, while testifying before the House of Commons finance committee in March.

Inflation has slightly cooled off according to the latest Consumer Price Index (CPI) data from Statistics Canada, going down to 7.6 percent in July after reaching 8.1 percent in June.

The Bank of Canada (BoC) has moved aggressively to attempt to take inflation back under control with oversized rate hikes.

It announced a 75 basis points hike (0.75 percent) on Sept. 7 to bring its overnight rate to 3.25 percent, representing a 3 percent increase since March. The BoC indicated more hikes are coming.

Conservative Party MPs reacted to the hike, saying it would bring “more pain for Canadians struggling to keep up with record cost of living pressures.”

“Despite being warned that out-of-control spending would continue to put enormous upward pressure on inflation and interest rates, Justin Trudeau and his NDP allies have refused to change course,” wrote MPs Dan Albas and Gérard Deltell, respectively finance and industry critics, in a joint statement.