“Instead of developing a tailored response aimed at slowing profits, stopping profiteering, fixing supply chain bottlenecks and helping workers keep up, policymakers have blamed workers – including the governor of the Bank of Canada , which has effectively declared class war on workers in this country,” said UNIFOR President Lana Payne. UNIFOR represents more than 300,000 workers. Payne said shareholders and business executives are reaping “obscene benefits in the form of higher dividends, share buybacks and bonuses” while workers struggle with high inflation. “The medicine that the Bank has, in relation to inflation, is causing a lot of pain out there,” Payne said. “The fact is that the Bank of Canada has raised interest rates faster than many other countries in the world. We have to ask ourselves, is it really doing what it says it’s supposed to do?” Canada’s benchmark interest rate currently stands at 3.75 percent. In the United States it is 4 percent, while it is 3 percent in the United Kingdom and 2 percent in the European Union. Payne the Bank of Canada is sticking to its plan to raise interest rates even as inflation falls. “This seems like a lot of unnecessary pain for workers right now in Canada,” Payne said, adding that interest rates “are pretty high right now. We have to slow it down.” In a recent interview with CBC News, Macklem said that while rate hikes make life more difficult for many Canadians, they are necessary. “We don’t want to make this any harder than it has to be.” he told CBC’s Peter Armstrong. “But at the same time, if we don’t do enough, if we’re half-hearted, Canadians will have to continue to endure the high inflation that hurts them every day.”
Low unemployment and inflation
Analysts say that if the bank stops too soon while inflation is still rising, it will have to take even more aggressive measures down the road. On the other hand, if it overshoots and keeps hiking rates after inflation begins to decline sustainably, many Canadians will suffer needlessly. While Payne said she believes the Bank should hold off on further rate hikes, Macklem disagrees. “We think there is a need for further increases, but we are nearing the end of this tightening cycle. I can’t tell you exactly what that is,” he told Armstrong. “We’re not there yet. But we’re getting closer.” Payne also criticized Macklem for comments he made last week at the Public Policy Forum in Toronto, when he said the current low unemployment rate is unsustainable. “To blame workers for having a job and actually demanding decent wages, benefits and working conditions is simply unacceptable. We need an economy that works for everyone, not one that only works for the few,” he said. Macklem said last week that while the low unemployment rate means more people are working, it also means employers are struggling harder to fill positions. “The tightness in the labor market is a symptom of the general imbalance between demand and supply that is fueling inflation and hurting all Canadians,” he said, adding that “relieving pressure on the labor market will help restore price stability.”
