Affordability: Ottawa has little wiggle room, experts say

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Affordability: Ottawa has little wiggle room, experts say

Political parties have very different approaches to dealing with high energy, food and housing prices.

With July inflation up 7, 6% over the same period last year, the cost of living continues to eat away at Canadians' savings. And if the federal government is trying to meet the affordability challenge, inflation itself seems very difficult to control, according to experts.

Ottawa announced new measures for consumers this week, including housing assistance, as well as increased Goods and Services Tax (GSTC) credits and a new dental benefit.

These are things that will make a difference in people's lives right now, but they're targeted enough not to contribute to higher inflation, Prime Minister Justin Trudeau said.

Opposition Leader Pierre Poilievre, however, argued that the plan will add fuel to the flames of inflation. Scotiabank's head of financial markets economics, Derek Holt, also criticized the government for shelling out more spending.

Trevor Tombe, an economist at the x27;University of Calgary, told CBC the recently announced measures were unlikely to have a significant effect.

But he noted that it could be difficult to tackle the fundamental problem of inflation quickly, so governments must clearly and explicitly recognize that there is no great -thing to do in the very short term, he added.

Much of the inflation is caused by global factors and high energy prices, he said, which government spending or transfer policies can only have an impact on. limit. The Bank of Canada's rate hikes will also take time to have an effect on inflation, Tombe noted.

The Consumer Price Index stands at 7.6% in July in Canada

Sean Speer, senior fellow at the Munk School of Global Affairs and former economic policy adviser to Stephen Harper, agreed that long-term planning is needed to address the key challenges facing Canada today; today.

I don't think we've heard enough from the government about short term plans or to boost supply, or more important long term plans . There are so many areas where we find ourselves with supply constraints: healthcare, housing, energy.

On this last point, Mr. Speer noted that the federal carbon tax could return to the table of political battles.

While the purpose of the carbon tax is to increase in prices over time, there has been such a large increase in energy prices in the last 12 months or so that it is likely to accelerate even more rapidly the increases predicted by this carbon tax, he explained.

NDP Leader Jagmeet Singh told the House that the new federal aid package – which he billed as a major win – will help ease costs for Canadians, easing the burden of dental costs while other prices remain high.

But he said the dental benefit is only a temporary diet. In an interview with The Canadian Press, he assured that his party would no longer be flexible with the government on this issue and expected a full program next year.

With information from CBC

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