What you need to know about inflation in Canada | Canada News Media
Connect with us

News

What you need to know about inflation in Canada

Published

 on

What you need to know about inflation in Canada

The coronavirus pandemic contributed significantly to the current economic crisis in Canada. High inflation pushed companies out of business, and thousands of Canadians lost their jobs. However, the country’s economy recovered faster from the pandemic than many observers predicted.

The wage growth was back to the pre-pandemic level, and the unemployment rate by 2021 was at an all-time low. Unfortunately, a war broke out in Ukraine, reversing all the gains.

The inflation in Canada has constricted family budgets and increased business operational costs. Economic experts warn that the inflation in Canada may reach a self-sustaining level if the war in Ukraine doesn’t end soon enough. Canadians on fixed or low income are the worst hit by inflation.

You probably wonder what could have led to the high inflation in Canada despite a promising recovery from the pandemic. Here are three causes of the high inflation in the country.

  1. Soaring Prices Of Basic Commodities

The Bank of Canada has identified the excessive demand for products as the primary driving factor for the soaring inflation. There’s a high demand for essential food products from the international market. Canada depends on the global market for essential commodities such as gas and cooking oil. Ukraine is the primary exporter of corn and sunflower oil in the international market.

However, the ongoing war in Ukraine disrupted the supply chain of these basic commodities. The disruption led to an increase in demand and price.

Canadians have contributed to inflation by purchasing highly-priced basic commodities. Sadly, inflation becomes ingrained when it feeds on itself; this is the situation in the country. The price of essential commodities increases because of the rising manufacturing and supply chain costs.

The Bank of Canada must take proactive steps before inflation becomes self-fulfilling. Businesses and households expect the prices of commodities to keep soaring. And they behave accordingly.

  1. Disruptions In The Global Supply Chain

Global economies thrive through interdependency. But the coronavirus pandemic disrupted the global supply chain. In response, the demand for essential products soared. The unpredictable global marketplace caused the high demand, and Canadians responded by increasing their spending on basic commodities.

Similarly, companies used debt to secure enough raw materials from global suppliers. The war in Ukraine exacerbated the demand for products in the international market. Low demand for the Canadian dollar in foreign exchange further increased inflation. Since domestic markets lack direct control over internationally traded goods, inflation in Canada became inevitable.

  1. The Need To Balance Trade-Offs

When inflation increased in 2021, the Bank of Canada decided to raise the interest rate for a short duration. This strategy cushioned the country from inflation shocks across the border. The principle behind it was that international inflation would subside over time. However, this was a short-term solution designed to weigh in on trade-offs.

Apart from absorbing global shock, the Bank of Canada hoped the monetary policy would restore jobs lost during the pandemic.

Unfortunately, disruptions in the supply chain and the war in Ukraine have lasted longer than expected. No one knows when the war in Ukraine will end; therefore, the global supply chain remains unpredictable.

Intervention Strategy

According to the Bank of Canada, the inflation may be too high but hasn’t reached the self-fulfilling stage. Therefore, it’s easier to bring it down at this stage before it peaks at an unsustainable level. The Bank of Canada has responded to frenzy spending by increasing lending rates in March 2022. It has increased the interest rates to curb inflation in four ways:

  • Discourage borrowing: The move will prevent Canadians from excessive and uninformed spending behaviour.
  • Encourage saving: The high-interest rates will encourage Canadians to save their money, thus stabilizing inflation and stimulating economic growth.
  • Increase the value of the Canadian dollar: The move will help reduce the demand for the American dollar in the country which is required for international purchasing.
  • Reduce the demand for products and services: The demand for goods and services is responsible for inflation in Canada. The Bank of Canada hopes to minimize the demand for goods by reducing the currency in circulation

Conclusion

The war in Ukraine is primarily responsible for Canada’s current inflation. Unfortunately, cross-border wars are unpredictable. There’s no way to predict when the war will end. Therefore, it’s difficult to tell when Ukraine shall recover from the war and stabilize its trade activities with Canada.

However, the Bank of Canada can take several proactive measures to minimize inflation before it peaks at an entrenched level. There could be risks of plunging the economy into depression. However, when monetary policies such as increasing the lending rates take effect, the Bank of Canada can tame inflation to manageable levels without hurting the economy.

News

Eby wants all-party probe into B.C. vote count errors as election boss blames weather

Published

 on

Premier David Eby is proposing an all-party committee investigate mistakes made during the British Columbia election vote tally, including an uncounted ballot box and unreported votes in three-quarters of the province’s 93 ridings.

The proposal comes after B.C.’s chief electoral officer blamed extreme weather, long working hours and a new voting system for human errors behind the mistakes in last month’s count, though none were large enough to change the initial results.

Anton Boegman says the agency is already investigating the mistakes to “identify key lessons learned” to improve training, change processes or make recommendations for legislative change.

He says the uncounted ballot box containing about 861 votes in Prince George-Mackenzie was never lost, and was always securely in the custody of election officials.

Boegman says a failure in five districts to properly report a small number of out-of-district votes, meanwhile, rippled through to the counts in 69 ridings.

Eby says the NDP will propose that a committee examine the systems used and steps taken by Elections BC, then recommend improvements in future elections.

“I look forward to working with all MLAs to uphold our shared commitment to free and fair elections, the foundation of our democracy,” he said in a statement Tuesday, after a news conference by Boegman.

Boegman said if an independent review does occur, “Elections BC will, of course, fully participate in that process.”

He said the mistakes came to light when a “discrepancy” of 14 votes was noticed in the riding of Surrey-Guildford, spurring a review that increased the number of unreported votes there to 28.

Surrey-Guildford was the closest race in the election and the NDP victory there gave Eby a one-seat majority. The discovery reduced the NDP’s victory margin from 27 to 21, pending the outcome of a judicial review that was previously triggered because the race was so close.

The mistakes in Surrey-Guildford resulted in a provincewide audit that found the other errors, Boegman said.

“These mistakes were a result of human error. Our elections rely on the work of over 17,000 election officials from communities across the province,” he said.

“Election officials were working 14 hours or more on voting days and on final voting day in particular faced extremely challenging weather conditions in many parts of the province.

“These conditions likely contributed to these mistakes,” he said.

B.C.’s “vote anywhere” model also played a role in the errors, said Boegman, who said he had issued an order to correct the results in the affected ridings.

Boegman said the uncounted Prince George-Mackenzie ballot box was used on the first day of advance voting. Election officials later discovered a vote hadn’t been tabulated, so they retabulated the ballots but mistakenly omitted the box of first-day votes, only including ballots from the second day.

Boegman said the issues discovered in the provincewide audit will be “fully documented” in his report to the legislature on the provincial election, the first held using electronic tabulators.

He said he was confident election officials found all “anomalies.”

B.C. Conservative Party Leader John Rustad had said on Monday that the errors were “an unprecedented failure by the very institution responsible for ensuring the fairness and accuracy of our elections.”

Rustad said he was not disputing the outcomes as judicial recounts continue, but said “it’s clear that mistakes like these severely undermine public trust in our electoral process.”

Rustad called for an “independent review” to make sure the errors never happen again.

Boegman, who said the election required fewer than half the number of workers under the old paper-based system, said results for the election would be returned in 90 of the province’s 93 ridings on Tuesday.

Full judicial recounts will be held in Surrey-Guildford and Kelowna-Centre, while a partial recount of the uncounted box will take place in Prince George-Mackenzie.

Boegman said out-of-district voting had been a part of B.C.’s elections for many decades, and explained how thousands of voters utilized the province’s vote-by-phone system, calling it a “very secure model” for people with disabilities.

“I think this is a unique and very important part of our elections, providing accessibility to British Columbians,” he said. “They have unparalleled access to the ballot box that is not found in other jurisdictions in Canada.”

This report by The Canadian Press was first published Nov. 5, 2024.



Source link

Continue Reading

News

Memorial set for Sunday in Winnipeg for judge, senator, TRC chair Murray Sinclair

Published

 on

WINNIPEG – A public memorial honouring former judge, senator and chair of the Truth and Reconciliation Commission into residential schools, Murray Sinclair, is set to take place in Winnipeg on Sunday.

The event, which is being organized by the federal and Manitoba governments, will be at Canada Life Centre, home of the NHL’s Winnipeg Jets.

Sinclair died Monday in a Winnipeg hospital at the age of 73.

A teepee and a sacred fire were set up outside the Manitoba legislature for people to pay their respects hours after news of his death became public. The province has said it will remain open to the public until Sinclair’s funeral.

Sinclair’s family continues to invite people to visit the sacred fire and offer tobacco.

The family thanked the public for sharing words of love and support as tributes poured in this week.

“The significance of Mazina Giizhik’s (the One Who Speaks of Pictures in the Sky) impact and reach cannot be overstated,” the family said in a statement on Tuesday, noting Sinclair’s traditional Anishinaabe name.

“He touched many lives and impacted thousands of people.”

They encourage the public to celebrate his life and journey home.

A visitation for extended family, friends and community is also scheduled to take place Wednesday morning.

Leaders from across Canada shared their memories of Sinclair.

Premier Wab Kinew called Sinclair one of the key architects of the era of reconciliation.

Prime Minister Justin Trudeau said Sinclair was a teacher, a guide and a friend who helped the country navigate tough realities.

Sinclair was the first Indigenous judge in Manitoba — the second in Canada.

He served as co-chair of the Aboriginal Justice Inquiry of Manitoba to examine whether the justice system was failing Indigenous people after the murder of Helen Betty Osborne and the police shooting death of First Nations leader J.J. Harper.

In leading the Truth and Reconciliation Commission, he participated in hundreds of hearings across Canada and heard testimony from thousands of residential school survivors.

The commissioners released their widely influential final report in 2015, which described what took place at the institutions as cultural genocide and included 94 calls to action.

This report by The Canadian Press was first published Nov. 5, 2024.

The Canadian Press. All rights reserved.



Source link

Continue Reading

News

House of Commons committee looks to recall Tom Clark about New York City condo

Published

 on

OTTAWA – Members of Parliament studying the federal government’s decision to buy a $9-million luxury condo in Manhattan are preparing to recall Canada’s consul general in New York to answer more questions about his involvement in the purchase.

The Conservatives put forward a motion on Tuesday to have Tom Clark return to the House operations committee. The move was supported by other opposition parties after new information emerged that contradicted his previous testimony.

Clark told the committee in September he had no role whatsoever in the purchase of the new condo, or the sale of the previous residence.

But reporting from Politico on Tuesday indicated Clark raised concerns about the old unit two months after he was appointed to his role as Canada’s representative in New York.

Politico cited documents obtained through access-to-information, which were then shared with other media by the Conservative party.

A May 2023 report from Global Affairs Canada indicates Clark informed government officials the residence needed to be replaced.

“The current (consul general in New York, head of mission) expressed concerns regarding the completion of the … kitchen and refurbishment project and indicated the unit was not suitable to be the (consul general’s) accommodations,” the report reads.

“It does not have an ideal floor plan for (consul general in New York) representational activities.”

The final call on whether Clark will face further questions has not been made, however, because the committee adjourned before the motion went to a vote. The committee’s next meeting is next week.

Tuesday’s meeting featured Foreign Affairs Minister Mélanie Joly as a witness, and she faced questions about Clark’s involvement in the purchase.

“This was not a political decision because this was an operational decision,” Joly told the committee in a testy exchange with Conservative MP Michael Barrett.

“(The committee) had numerous people, officials of mine, that came to see you and said that. So, these are the facts.”

Joly later told the committee she only learned of the decision to purchase a new residence through media reports, even though her chief of staff was notified weeks earlier.

“The department informed my chief of staff once the decision was taken. Because, of course, it was not a political decision,” Joly said.

Shortly before Joly was excused, Conservative MP Stephanie Kusie put forward the motion to recall Clark for two more hours to answer more questions.

Bloc MP Julie Vignola proposed instead to have him testify for only one hour — indicating she would support the motion with that change.

“One hour is more than enough to know whether he lied to us,” Vignola told her colleagues in French.

NDP MP Taylor Bachrach also said he would support the move, given the contrast between the new report and Clark’s testimony about whether he spoke to anyone about a desire to move into a new residence.

“What really irks me is the consul general was so clear in response to repeated questioning at committee,” Bachrach said.

“Mr. Clark said, ‘Never.’ One-word answer, ‘Never.’ You can’t get more unequivocal than that.”

The Liberal government has argued that buying the new residence will save Canadians taxpayers millions of dollars and reduce ongoing maintenance costs and property taxes while supporting future program needs for the consul general.

The former official residence is listed for sale at $13 million, but has yet to be sold.

In her remarks Tuesday, Joly told the committee other like-minded countries have paid more for their Manhattan residences than Canada has — including $11 million for the U.K., and France’s $19 million purchase in 2015.

Joly said among the countries that have residences in New York, only Afghanistan and Bangladesh were not located in Manhattan.

This report by The Canadian Press was first published Nov. 5, 2024.

The Canadian Press. All rights reserved.



Source link

Continue Reading

Trending

Exit mobile version