Since the Trudeau government is taking credit for a third interest rate cut to 4.25% from a high of 5.0% last year, does that mean it also accepts responsibility for Canada’s 6.6% unemployment rate, the highest it’s been since 2017, save for the pandemic years?
Or is it instead continuing its long-standing practice of taking credit for good economic news while ignoring it when it’s bad?
Finance Minister Chrystia Freeland tweeted last week that the Bank of Canada cutting interest rates to 4.25% was “good news” and “welcome relief for so many Canadians” that “shows that our economic plan is working.”
That means the Liberals are taking credit for the bank’s inflation control policy of raising interest rates 10 times — from 0.25% in March, 2022 to a 22-year high of 5% in July, 2023 — in order to combat an annual inflation rate that reached a 39-year high of 8.1% in June of 2022, and is now down to 2.5%, within Canada’s inflation control target.
That’s the good news.
But back when inflation was running at 8.1%, Freeland described it as a “global phenomenon driven in large part by the lasting impacts of a once-in-a-generation pandemic, and amplified by China’s ongoing COVID-zero policies and Russia’s illegal invasion of Ukraine.”
Simply put , the Trudeau government can’t have it both ways.
While it’s true many factors contribute to inflation, it can’t simultaneously argue its policies lowered inflation while they had nothing to do with high inflation.
On the heels of the Bank of Canada’s rate cut last week, Statistics Canada reported Canada’s August unemployment rate was 6.6%, meaning 1.5 million Canadians are out of work, an increase of 22.9% or 272,000 from last August.
That’s our highest unemployment rate since May 2017, save for the 2020/2021 pandemic.
Canada’s unemployment rate has generally trended up since April 2023, rising by 1.5 percentage points.
Among the reasons, the agency reported, was “strong population growth” almost all of which, it has previously said, is attributable to Canada’s high immigration policies.
Even Prime Minister Justin Trudeau has belatedly acknowledged immigration has “grown at a rate far beyond what Canada has been able to absorb.”
If the feds are going to take credit for good economic news, then accept responsibility when it’s bad.