Adrian Wyld The Canadian Press During her intervention, the parliamentary secretary to the Minister of Finance, Rachel Bendayan, did not criticize the provinces for their spending. Instead, she questioned the opposition, asking if it was suggesting that we should “require the provinces to spend less.”
It would be “very difficult” to “attribute inflation to federal government spending”, judges Ottawa, believing that it is rather the provinces which fueled it.
Earlier in the chamber this week, Conservative MP Dominique Vien, citing a Scotiabank report, argued that “excessive government spending adds two percentage points to interest rates in Canada.” “The report my colleague cites says that COVID-related supports and provincial government spending are responsible for an increase, not federal government spending,” replied Parliamentary Secretary to the Minister of Finance, Rachel Bendayan. .
However, the author of the said report specifies to Devoir that the federal government cannot exonerate itself from the growth in inflation in recent years, which has led to an increase in key rate, and rather confirms the criticisms of the conservatives.
Because if “the provinces have more responsibilities than the federal government” in terms of spending, Jean-François Perrault emphasizes that we must not forget to add to the calculation the federal transfers made during the pandemic, for the Canada Benefit. emergency, in particular. According to him, the two levels of government would have “roughly speaking” the same share of responsibility.
The economist adds that some spending linked to the pandemic, even if it had an effect on inflation, was “necessary”. “It's not really a question about the validity or otherwise of the tax policy that was implemented, but rather “did they do too much” or “did it last too long ”, he underlines.
During her speech in the Commons, MP Bendayan did not criticize the provinces for their spending. Instead, she questioned the opposition, asking if it was suggesting that we should “require the provinces to spend less.” Ms. Bendayan did not respond to requests from Devoir, which wanted her to clarify her remarks.
With its economic statement, the federal government “is intentionally not putting any fuel the fire of inflation”, however, indicated in writing the spokesperson for the Ministry of Finance, Katherine Cuplinskas.
In recent months, the Governor of the Bank of Canada, Tiff Macklem, noted on several occasions that the fiscal policy of governments, both provincial and federal, could complicate his task.
With Clémence Pavic
< p>This report is supported by the Local Journalism Initiative, funded by the Government of Canada.