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Political rhetoric on inflation is out of touch with reality, experts say – CBC News

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Prices in Canada are rising — and they’re rising fast.

Statistics Canada released its measure of inflation, the Consumer Price Index (CPI), earlier this week. It reported that prices are now 6.7 per cent higher than they were this time last year.

It’s the largest spike in the CPI since January of 1991, the year the government introduced the GST.

“Prices increased against the backdrop of sustained price pressure in Canadian housing markets, substantial supply constraints and geopolitical conflict, which has affected energy, commodity and agriculture markets,” StatsCan said.

The Bank of Canada has raised its benchmark interest rate by 0.5 per cent to 1 per cent, citing the need to curb inflation.

The rising cost of living has caught the attention of many prominent politicians. But is what they’re saying about it all true?

Is the federal government causing inflation?

Conservative leadership candidate Pierre Poilievre, a former finance critic who is widely considered to be the front-runner in the race, has made inflation a central part of his campaign.

Poilievre claims the Trudeau government’s approach to spending and taxation is a major force driving inflation.

“Trudeau’s big spending, deficits and taxes have driven up inflation, which in turn is now driving up interest rates,” Poilievre said in a recent news release.

Pierre Poilievre speaks at a press conference at Brandt Tractor Ltd. in Regina on Friday, March 4, 2022. Poilievre has often blamed the Trudeau government’s fiscal policies for rising prices. (Michael Bell/The Canadian Press)

“I would reverse JustinFlation with common sense policy, including: axing the carbon tax, phasing out inflationary deficits by ending wasteful spending and cancelling new promises and removing the gatekeepers to make more of what cash buys — energy, food and housing.”

Is Poilievre right? Is government fiscal policy driving up prices?

Jean-Paul Lam, an economics professor at the University of Waterloo and a former assistant chief economist at the Bank of Canada, said government spending is one of many factors pushing prices up — but it’s a relatively modest one.

Jean-Paul Lam, a professor of economics at the University of Waterloo, said he expects inflation will get worse in the months to come. (Jean-Paul Lam/Submitted)

Economic support programs related to the pandemic are a significant reason the federal deficit is so large now; the deficit was projected at $53 billion in the latest budget. But that doesn’t come close to explaining the rate of inflation we’re seeing now, he added.

“This is a minor factor … I don’t think the fiscal position of the government, although it has deteriorated significantly over the last two years, is a key factor to inflation right now,” he said.

Trevor Tombe, a professor of economics at the University of Calgary and a research fellow at the university’s School of Public Policy, said Poilievre is correct in the sense that government spending and taxation can be a factor in inflation.

“Fiscal policy can indeed matter for price levels if central banks don’t respond to that spending,” he said.

Trevor Tombe, a professor of economics at the University of Calgary, said there isn’t much Canada can do to address the main factors driving inflation. (Erin Collins/CBC)

But the federal government’s decisions on spending and taxation don’t have much of a relationship to the other, more important forces pushing prices up, he said.

“It really doesn’t matter what Canada’s government spends. Oil prices are going to rise and fall due to much larger global forces that are beyond our control,” he said.

“And even real estate prices being as high as they are, this is not a uniquely Canadian phenomenon. And we’re seeing home costs rising by roughly the same amount throughout the developed world that we’re seeing here in Canada.”

What about those big corporate profits?

NDP Leader Jagmeet Singh took to Instagram Wednesday to talk about the rising cost of living.

He argued that inflation is being driven not by supply issues, nor by government stimulus programs, but by big companies looking to boost profits.

“It’s because of greed,” Singh said. “When the cost of things goes up, it hurts some people, but it benefits those at the very top.”

NDP Leader Jagmeet Singh rises during question period in the House of Commons on April 6, 2022. Singh says corporate greed is responsible for rising prices, but economist Trevor Tombe said Singh is simplifying a complex issue for political gain. (Sean Kilpatrick/The Canadian Press)

There’s some truth to the picture Singh paints, Lam said.

The pandemic has wiped out many smaller businesses, which means some bigger firms are facing less competition now. Businesses often raise prices when this happens, he said.

Some businesses also have faced increasing costs for raw materials and supplies, he said, and have passed those costs onto customers by raising prices.

But that doesn’t mean Singh’s reasoning is sound, he added.

“I think it’s a bit too simplistic in terms of [an] explanation of inflation,” Lam said. Pricing decisions being made by corporations now are largely responses to inflationary pressures coming from other factors, such as global supply constraints, he said.

Tombe agreed.

“This is, again, an example of political language oversimplifying complex issues like inflation,” he said.

Tombe points to the auto industry, where a severe shortage of car parts has gutted supply and pushed up prices — but not necessarily profits.

“And so there’s a lot of factors here that have nothing to do with greed, with market power, with corporate profits,” Tombe said.

Lam and Tombe both said, however, that Singh has put his finger on an important point: inflation doesn’t affect everyone the same way.

The well-off don’t necessarily benefit from inflation — prices are rising for everyone, after all, including the rich — but the poor have a harder time dealing with more expensive essential goods. The price of groceries, for example, has increased 8.7 per cent compared to last year, according to the CPI.

And those with certain types of assets may benefit from inflation if the value of what they own goes up. Real estate is a good example of this, Lam said.

How about the Bank of Canada?

The bad news for people in financially precarious positions may not end with rising prices, Lam said.

Canada’s central bank is likely to continue raising interest rates to address inflation, he said. That means debt loads will be more expensive to service.

“So you can see that the young people who’ve just got in the housing market, the people who have a lot of debt and coping with high mortgage debt, they are the one who are going to be hurt disproportionately compared to the people who have a massive amount of wealth,” Lam said.

The Bank of Canada building in Ottawa on Tuesday, Jan. 25, 2022. The bank has raised interest rates in response to rising inflation. (David Kawai/Bloomberg)

The Bank of Canada has also been in Poilievre’s crosshairs. He has criticized its approach to monetary policy and accused it of driving inflation.

Tombe said that while Canada’s central bank hasn’t always performed flawlessly, it would be unfair to expect perfection given the unprecedented disruptions the global economy has faced in recent years.

“While I think, in retrospect, central banks ought to have been tightening earlier, I don’t think that means they made a mistake given what they knew at the time, and given what was reasonable and all of the uncertainties involved,” he said.

Lam’s assessment of the bank’s response to inflation is less forgiving.

“I think they’ve been very slow to react to inflation,” he said.

“Their main message was, ‘Don’t worry, it’s transitory. It’s going to go back to two per cent, etc.’ They, I think, made a mistake by sticking to that message for too long.”

So what is driving inflation?

If the federal government, big business and the central bank aren’t the primary culprits, what is causing prices to spike?

The answer to that question may be frustrating for the government — and for those seeking to lead it, like Poilievre and Singh. This current wave of inflation is mostly the result of global supply chain issues and geopolitical tensions — things over which Canada has little influence.

The Russia-Ukraine war has affected energy and food prices. Supply chain issues — especially in China, thanks to pandemic restrictions — are major factors, Lam said.

Demand for goods and services is also higher right now than many analysts predicted it would be earlier in the pandemic, he added.

“I think the bad news for Canadians is probably [inflation] is going to go higher in the months to come,” he said.

Lam said raising interest rates is the most effective way of bringing inflation down, but it will be a difficult balance for the Bank of Canada to strike.

Tombe agreed with Lam’s assessment of Canada’s vulnerability. As a small trading nation, he said, Canada is exposed to global supply and geopolitical shocks but has few tools to fight back.

The situation calls for a cautious approach, he added.

“We don’t want to overreact to what are potentially temporary factors,” he said.

“If energy prices don’t continue to rise, if home prices don’t continue to rise at the rapid pace that we’ve seen, then inflation should get back closer to what we consider normal later this year and early next.”

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Mitchell throws two TD passes as Ticats earn important 37-21 home win over Redblacks

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September 14, 2024

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HAMILTON – It remains faint but Bo Levi Mitchell and the Hamilton Tiger-Cats still have a playoff pulse.

Mitchell threw two touchdown passes as Hamilton defeated the Ottawa Redblacks 37-21 in the CFL’s annual Hall of Fame game Saturday afternoon. The Ticats (4-9) earned a second straight win to move to within six points of the third-place Toronto Argonauts (7-6) in the East Division.

Hamilton visits Toronto on Friday night.

“Obviously they’re (wins) huge now,” Mitchell said. “We didn’t do ourselves any favours by getting into this position and not being able to really control our own destiny.

“But right now, we need certain people to win at certain times. Our job is to go out there and try to win the next five, then the next three after that.”

Mitchell finished 20-of-27 passing for 299 yards and an interception. He entered weekend action leading the CFL in passing yards (3,383) and TD strikes (21).

Greg Bell’s 15-yard TD run at 11:30 of the fourth and two-point convert put Hamilton up 36-21 after backup Jeremiah Masoli led Ottawa on two scoring drives. Following a 13-yard TD strike to Andre Miller at 2:53, Masoli found Dominique Rhymes on a 10-yard touchdown pass at 7:43 before Khalan Laborn’s two-point convert cut Hamilton’s lead to 29-21.

“When you’re scoring from (15) yards out on a run play, that makes offence easy,” Mitchell said. “It’s one of those things when you get down there as a quarterback, it takes you sometimes five, eight, 10 plays and now it’s ‘OK, now we have to create some stuff and find something.’

“When you hand the ball off and you’re scoring from (15) yards, it makes the offence really easy.”

Ottawa (8-4-1) would have clinched a playoff spot with a victory.

Ottawa committed six turnovers (three interceptions, two fumbles, once on downs) before an announced Tim Hortons Field gathering of 22,119. Lawrence Woods III also returned a punt 83 yards for a touchdown at 11:51 of the first quarter that put Hamilton ahead 10-3.

“You’ve got to bring your best every single week and this wasn’t our best, all of us, from coaches to the players,” said Ottawa head coach Bob Dyce. “If you don’t play great for four quarters, I don’t care who you’re playing you’re not going to have a successful day.

“We should’ve made the tackle (on Woods), we had him wrapped up it’s that simple. Even though we didn’t make the play on that, there should’ve been extra bodies there to clean it up when he did break the tackle.”

Hamilton also tied the season series with Ottawa 1-1. The teams meet again at TD Place on Oct. 25.

“If we didn’t turn it over today I would’ve said we played really well offensively and that to me is what the biggest difference is,” said Hamilton head coach Scott Milanovich. “Even the turnovers today (interception, fumble), at least they were in their end and we weren’t giving them a short field.

“The biggest play of the game was Woodsie’s return. It got us jump-started, gave us the lead and we were kind of off after that.”

Ottawa starter Dru Brown was 17-of-27 passing for 164 yards and an interception. Masoli entered late in the third and finished 13-of-19 passing for 183 yards with two TDs and two interceptions, but Dyce said Brown will start next weekend against Montreal (10-2-1), which earned a 19-19 tie Saturday night with Calgary (4-8-1).

The Canadian Football Hall of Fame’s ’24 class of S.J. Green, Chad Owens, Weston Dressler, Vince Goldsmith and Vince Coleman, along with builders Ray Jauch and Ed Laverty (posthumously), was honoured at halftime. All were enshrined Friday night.

Steven Dunbar Jr. and Ante Litre had Hamilton’s other touchdowns. Marc Liegghio kicked two field goals, three converts and two singles.

Ottawa’s Lewis Ward booted two field goals and a convert.

Mitchell culminated a five-play, 96-yard march with a 20-yard TD pass to Litre at 13:34 of the third. It followed Jonathan Moxey’s interception.

Liegghio’s single at 7:05 of the third put Hamilton up 22-6.

Mitchell’s 54-yard TD strike to Dunbar at 14:18 of the second staked Hamilton to its 21-6 halftime lead. The advantage was well-deserved as the Ticats had more first downs (12-six), net offensive yards (260-144) and scored on both offence and special teams.

Mitchell was 14-of-20 passing for 210 yards and a TD, but his interception cost Hamilton at least a field-goal attempt. Dunbar had five receptions for 113 yards and the touchdown.

Brown completed 13-of-21 passes for 127 yards.

Liegghio’s missed 47-yard attempt went for the single at 12:45 to put Hamilton ahead 14-6. It followed a Kiondre Smith catch that was ruled incomplete and at the very least cost the Ticats a first down that would’ve kept the drive alive.

Ward’s 30-yard kick at 9:15 had pulled Ottawa to within 13-6.

Liegghio’s 19-yard field goal at 5:13 pushed Hamilton’s lead to 13-3. It followed the defence stopping Ottawa’s Dustin Crum on third-and-one, giving the Ticats possession at the Redblacks 40.

Liegghio’s 47-yard field goal opened the scoring at 2:42 before Ward tied in with a 24-yard boot at 8:44.

UP NEXT

Redblacks: Host the Montreal Alouettes (10-2-1) next Saturday, Sept. 21.

Tiger-Cats: Visit the Toronto Argonauts (7-6) on Friday.

This report by The Canadian Press was first published Sept. 14, 2024.



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Toronto FC downs Austin FC to pick up three much-needed points in MLS playoff push

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September 14, 2024

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TORONTO – Needing three points to keep their playoff push alive, Toronto FC’s Jonathan Osorio and Deandre Kerr stepped up with first-half goals against Austin FC on Saturday with goalkeeper Sean Johnson doing his bit at the other end.

A 76th-minute goal by Austin’s Owen Wolff made for a nervy ending but TFC hung on for a 2-1 win.

While Toronto (11-15-3) remains on the Major League Soccer playoff bubble in eighth place in the Eastern Conference (the eighth- and ninth-place teams in each conference square off in a wild-card playoff with the winner facing the top seed in the conference), other results went their way.

Seventh-place Charlotte, 10th-place Atlanta and 11th-place Philadelphia all lost while ninth-place D.C. United tied.

Toronto midfielder Alonso Coello called it “a game we had to win.”

“It’s a big win … To see that fight tonight was important,” added coach John Herdman.

Austin (9-12-7) came into the game in 11th place in the West, two points below ninth-place Minnesota. The Texas side has won just one of its last six league games (1-4-1).

Austin outshot Toronto 7-6 (6-2 edge in shots on target) in the first half but found itself trailing 2-0 at the break as Toronto took advantage of its chances and the visitors didn’t in their first-ever visit to BMO Field, before an announced crowd of 25,538.

Toronto had a dream start, catching Austin on the counterattack in the seventh minute. A sliding Austin player dispossessed an onrushing Kerr, who had been set free by a long ball from Coello, but the ball bounced to Osorio, who beat goalkeeper Brad Stuver with a rising shot.

It was the Toronto captain’s second goal of the season in league play and his 65th for TFC in all competitions. Only Sebastian Giovinco (83) and Jozy Altidore (79) scored more in Toronto colours.

TFC went ahead on another counterattack in the 30th minute after an Austin giveaway. Osorio found Richie Laryea outpacing his marker and the wingback unselfishly sent a perfect low cross across goal for Kerr to knock home for his third of the season.

Wolff, the son of Austin head coach Josh Wolff, made it interesting with his late strike. The 19-year-old U.S. youth international, controlling a long ball, beat defender Raoul Petretta and then waited out Johnson before slotting it home for his first of the season.

Toronto survived a nervy six minutes of stoppage time as Austin pressed for the equalizer. Austin outshot Toronto 14-9 (8-3 in shots on target) and had 52.5 per cent possession.

The win evened Toronto’s home record at 7-7-0, while Austin slipped to 3-8-3 on the road.

It was a costly evening for Austin with defender Brendan Hines-Ike, midfielder Jhojan Valencia and star attacker Sebastian Driussi allpicking up cautions to miss Wednesday’s game with Los Angeles FC due to yellow-card accumulation.

Toronto defender Shane O’Neill will miss Wednesday’s game against visiting Columbus for the same reason. Toronto could be short mid-week, too. The hope is veteran centre back Kevin Long, who missed Saturday’s game after tweaking his hamstring in training, will be good to go.

Toronto has five games remaining, including three more at home as it looks to return to the post-season for the first time since 2020 when it lost to Nashville after extra time at the first hurdle.

It is a challenging road.

TFC hosts Columbus, the New York Red Bulls and Inter Miami while playing away at the Colorado Rapids and Chicago Fire. All but Chicago are in playoff positions.

The only previous meeting between Toronto and Austin was in May 2023, when Zardes scored a 91st-minute winner to give Austin a 1-0 win over visiting Toronto, which was then mired at the bottom of the Eastern Conference. That loss prompted a post-game outburst from Italian star Federico Bernardeschi about TFC’s drab play.

Then-coach Bob Bradley benched Bernardeschi for the next game.

Current coach John Herdman made four changes to his starting 11 with Bernardeschi and Osorio returning from suspension and Coello and Kerr also slotting in. Coello, who had missed the last eight league games with a hamstring injury, was impressive in his 59-minute return.

Both Toronto and Austin suffered home losses last time out going into the international break. Toronto was beaten 3-1 by D.C. United while Austin lost 1-0 to Vancouver.

—

Follow @NeilMDavidson on X platform.

This report by The Canadian Press was first published Sept. 14, 2024.

The Canadian Press. All rights reserved.



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CF Montreal finds its groove with 2-1 win over Charlotte

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September 14, 2024

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MONTREAL – CF Montreal is back in the win column after securing a 2-1 Major League Soccer win over Charlotte FC on Saturday night at Stade Saputo.

Montreal’s form had suffered of late, with just one win in MLS since July, but Laurent Courtois’ squad showed a level of poise and control over the tempo of the game that had not been seen since the beginning of the season.

“What we’ve changed in the last few weeks or months in terms of our methodology or coaching, is nothing. We did the exact thing, We had the exact same words, and we expressed them the exact same way,” said Courtois. “Today, everything just clicked.”

Caden Clark scored for the first time as a Montreal (7-12-9) player in the 23rd minute, in addition to Bryce Duke’s goal three minutes later that ended up being the winner, while Tim Ream found the back of the net for Charlotte (10-10-8).

Montreal had the first major scoring chance of the match after 15 minutes of play. With a free kick roughly 25 metres away from goal, Gabriele Corbo sent a near-perfect shot smashing off the crossbar.

Montreal would continue to dictate the tempo in the opening phase, finding first blood just seven minutes later.

Following a phenomenal triple-save from Charlotte goalkeeper Kristijan Kahlina, the ball fell to Clark who volleyed the ball into the wide-open net, picking up his first goal for the club.

“I think you don’t lose the feeling (of scoring), everything happens for a reason, you just can’t lose yourself in the chaos,” said Clark, who had missed a full season due to injury and was briefly without a club, but was grateful for Courtois’ confidence in him.

“(To have a coach’s confidence) is huge and is something I’ve had both ends of so you just can’t take advantage of that in the wrong way. I’m going to keep my discipline with the game plan and keep my head right.”

With momentum completely on their side, the home side doubled the lead just three minutes later. Montreal continued to build up play on the left flank and found a streaking Raheem Edwards in behind the defence who cut the ball back to Duke, sending the Stade Saputo crowd into a frenzy.

Just after the half-hour mark, Charlotte pulled one back through a set piece — something Montreal has struggled defending all season — as Ream rose above everyone at the back post to score his first with his new club.

The second half began in a similar fashion to the end of the first, with Charlotte pressing high up the pitch and forcing several turnovers in dangerous areas. After surviving the pressure, Montreal began to regain control of the game near the hour mark, enjoying the lion’s share of the possession while Charlotte looked to hit back on the counterattack.

“I think when we conceded that goal we were like ‘here we go again.’ 2-1 is a tough lead before halftime … and at the beginning of the half we kind of shot ourselves in the foot and they pressed a bit more, they moved a bit more forward and that opened some gaps,” said captain Samuel Piette.

“I was happy with that, it shows character. At the end of the day, we just wanted the three points and that’s what we got.”

As the game progressed, Charlotte pushed harder to find an equalizer but to no avail. With only one shot on target conceded, the second-worst defence in the league put up an impressive front and confidently rebuffed every single Charlotte attack.

“I’m a big fan of the back five’s performance in their discipline, competitiveness, and synchronization with balls in behind,” said Courtois.

“We can’t explain sometimes in a game it’s not there, they’re capable and today they showed it. Let’s see tomorrow.”

UP NEXT

Both teams are back in action on Sept. 18 away from home as Montreal will look to avenge a 5-0 rout against the New England Revolution while Charlotte visits Orlando City SC.

This report by The Canadian Press was first published Sept. 14, 2024.

The Canadian Press. All rights reserved.



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