Bank of Canada’s eighth consecutive rate hike means workers will take another hit

January 25, 2023

Bruske: With inflation moderating, Bank of Canada has no excuse to further burden Canadians

OTTAWA––Canada’s unions are disappointed by the central bank’s decision to continue with its monetary tightening. The most recent consumer price index numbers in Canada and abroad showed that inflation is moderating – yet the Bank is stubbornly raising interest rates for the eighth time.  

“We certainly shouldn’t be fooled by the speculation about when the Bank of Canada will finally relent,” said Bea Bruske, President of the Canadian Labour Congress. “The Bank has continuously raised interest rates, more than any other G7 country. The Bank seems undeterred, despite more and more voices joining Canada’s unions in calling for a halt to its tightening cycle,” added Bruske. 

Workers are feeling the pinch of higher rent and mortgage payments and rising food costs, with shocking numbers turning to food banks and community organizations to feed their families. Soaring prices for everyday necessities are affecting everyone, while workers continue to see their wages fall further behind inflation.

According to the Bank of Canada’s most recent survey, Canadians are reducing expenses and reviewing their budgets as they prepare for a looming recession.  

“The Bank of Canada says it expects inflation to return to normal by the end of 2024, but that’s two years away. In the meantime, workers are forced to make impossible choices in order to make ends meet,” said Bea Bruske. “No one should have to decide whether to pay the mortgage or put food on the table while rich CEOs continue to cash in all-time high profits.”

The government should do everything it can to help workers who stand to lose their jobs in the event of a recession. Canada’s unions have been urging the federal government to do its part to help families struggling with the affordability crisis. This must start with acting now to restore temporary EI measures until permanent improvements can take effect. We need this government to permanently strengthen our faded Employment Insurance system before it’s too late. Without Employment Insurance reform, many workers won’t have access to the benefits they need to put food on the table and keep a roof over their heads until they find a new job. Decades of cuts have resulted in only two in five unemployed people having access to EI. That’s why Canada’s unions have been sounding the alarm and demanding urgent reforms. 

“We will continue to do everything in our power to prevent job losses and stave off a disastrous recession,” said Bruske. “High inflation, rising interest rates, low wages and struggling public services such as public health care are stretching people’s ability to cope every day. We hope that decision-makers will act urgently to make profiteering corporations pay their fair share in 2023 and reinvest that money in programs Canadians need,” added Bruske. 

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