Another rate hike is bad news for workers and families

July 12, 2023

WINNIPEG–Canadian Labour Congress President Bea Bruske reacted with concern to the Bank of Canada’s decision to move ahead with yet another rate hike, despite slowing inflation.

“Unemployment is on the rise, our economy shows more signs of weakening, and inflation is slowing. If you factor out rising mortgage and rental rates – which are the result of the rate hikes – inflation is already within the Bank’s target range,” said Bruske. “Canada’s unions are deeply disappointed the Bank of Canada pushed ahead with more rate hikes that will drive up housing costs and throw more people out of work. Yet another tough economic blow to workers and families.”

With Statistics Canada reporting that the gap between the rich and poor is widening at the fastest pace on record, poverty rates are climbing and rising interest rates have hit low-income and younger people the most, Bruske said the Bank of Canada’s latest hike and the additional harm it will cause must be a wake-up call for the federal government to take action to help.

“Canada’s most vulnerable workers and families are being hit the hardest. While the government can’t set interest rates, there are many things they can do to make life less expensive,” explained Bruske. “Governments can create more affordable housing, implement publicly delivered universal pharmacare, and move ahead with a windfall tax, so profiteering grocery store giants and other companies driving up prices are made to pay their fair share. This could really help families struggling to get by.”

Bruske added that with the growing signs of an economic downturn and a rising unemployment rate, it is more important than ever that the government urgently moves ahead on Employment Insurance reforms when the House of Commons reconvenes in the fall.

“Even after they pay into the system for years, too often EI isn’t there for workers when they lose their job. Fewer than 2 in 5 unemployed people now even qualify for benefits,” explained Bruske. “We are looking to the government to urgently implement long overdue reforms of our Employment Insurance program when Parliament reconvenes this fall. We are on the precipice of a recession. If the government fails to act, too many people will be left without the help they need, just when they need it most.”

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