2023-09-05 01:08:18
Ontario Premier Doug Ford is the second premier to make a direct call on the Bank of Canada to stop raising interest rates.
Ford said he wrote to central bank governor Tiff Macklem on Sunday regarding the devastating impact of current interest rates on families and businesses in the province.
“Over the past 18 months, we have experienced ten interest rate hikes that have had a devastating impact on people who are already struggling to get by,” the letter reads.
The Bank of Canada raised its key interest rate to 5% in July, citing projections suggesting that it will take longer for national annual inflation to reach the bank’s target of 2%.
Mr Ford’s letter urges Mr Macklem to “consider the effect that higher interest rates have on ordinary people” before the bank announces its next interest rate decision.
“Even though the Bank of Canada has a mandate to keep inflation low, the latest monthly figures from Statistics Canada show that due to interest rate hikes, mortgage cost inflation for Ontario families is now 30%,” Mr. Ford wrote.
“Ontarians simply can’t afford the higher monthly mortgage payments caused by repeated interest rate hikes,” he continued.
Ford’s missive also indicates that Canadian banks expect higher defaults on loans and mortgages as a direct result of these rate hikes.
The Prime Minister goes on to say that the federal government should work with the provinces and territories to invest and build critical infrastructure projects rather than raising tariffs once more.
British Columbia Premier David Eby sent a similar letter to Macklem last Thursday expressing his objections to further hikes.
The letter mentions that people are “suffering” and that another rate hike next month might make inflation worse, not better.
“British Columbians are already suffering,” Eby wrote. In your role as governor, I urge you to consider the full human impact of rate increases and not increase rates further at this time. »
At a separate press conference last week, Mr. Eby was asked why he contacted Mr. Macklem when the Bank of Canada is an independent entity.
The Prime Minister acknowledged that he was the first to raise the issue with the Bank of Canada and said he had also written to the federal government to suggest ways “to work together to reduce costs without inflicting this kind of suffering to families.
“I think it’s extremely important to publicly point out to the Bank of Canada that, according to Statistics Canada, the main driver of inflation in our country right now is rising mortgage rates,” said Ms. .Eby.
He also wrote to Prime Minister Justin Trudeau last week calling for a targeted approach to fighting inflation, with a focus on improving housing and infrastructure.
The letter to Trudeau says focusing on these key sectors will have long-term anti-inflationary benefits while helping to grow the economy and improve productivity.
The Bank of Canada announces its key policy decision, the setting of interest rates, eight times a year.
Members of the bank’s Board of Governors observe a blackout period as decisions are made, according to the bank’s website.
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