With pressure growing to act, Liberals reference inflation worries in throne speech

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This article was published 22/11/2021 (1131 days ago), so information in it may no longer be current.

OTTAWA – The federal Liberals are facing rising pressure to detail how they plan to rebuild an economy upended by COVID-19 and cool inflation after delivering a throne speech that promised to rein in the rising cost of living.

The annual inflation rate hit an 18-year high in October, fuelled largely by rising prices at the pumps and grocery store aisles, with help from housing costs that may be shaking off their mid-year moderation.

Adding to price pressures are snarled supply chains around the globe that have been unable to keep up with rising consumer demand for goods.

Tuesday’s throne speech, which laid out the Liberals’ priorities for their third mandate, noted that inflation worries are affecting countries around the world, including at home despite the country’s economic performance.

The text of the speech spoke of the need to tackle the rising cost of living and pointed to Liberal campaign promises on housing and pre-election action for a national child-care system as planks in the affordability plan.

Goldy Hyder, CEO of the Business Council of Canada, welcomed the government’s pledge to build “a more resilient, sustainable and competitive economy,” including pledges to address climate change and boosting business investment.

Dennis Darby, president of Canadian Manufacturers and Exporters, noted the government pledge for more resilient supply chains and said he hoped to see more details in ministerial mandate letters.

Still, the speech fell short of what business groups and the opposition parties were looking for to address economic and affordability unease.

Business groups had also looked to the speech for a plan to help unclog supply-chain bottlenecks, and to tap the brakes on a $100-billion stimulus plan over worries that too much spending could spur inflation and hinder an economic recovery.

“It appears that everything is a priority with the exception of the economy,” said Perrin Beatty, president of the Canadian Chamber of Commerce, adding that more detail may come in an anticipated economic update in the coming weeks.

The National Council of Unemployed Workers said the speech neglected to mention modernizing employment insurance, or how to help self-employed workers who lost their safety net with the expiry of emergency benefits.

Finance Minister Chrystia Freeland will soon introduce a bill that would provide support to still-hurting industries like tourism and restaurants, and send unemployment aid to workers subjected to lockdowns. The move is part of what the throne speech called the government’s shift to “more targeted support, while prudently managing spending.”

NDP Leader Jagmeet Singh said his party won’t support a bill that cuts help to workers, while Bloc Québécois Leader Yves-François Blanchet signalled his support because the measure may provide aid to workers in the cultural sector.

Conservative finance critic Pierre Poilievre suggested his party could support targeted relief, but not the Liberals’ planned stimulus.

“We believe we should get back to normal pre-COVID levels of spending. We don’t believe that it is necessary to create new, permanent, multi-billion dollar programs that did not exist before COVID,” Poilievre said.

“What we need to do is get back to affordable government so that we can get an affordable cost of living.”

This report by The Canadian Press was first published Nov. 23, 2021.