Affordability in Canada is at a critical point – and politicians have no easy fix

For Canadians like Missy Anderson, the cost of living becomes a crisis.

She is 38 years old, a mother of four children and lives in Burlington, Ontario. Like many other Canadians, she has been forced to make tough choices about how she spends her money.

“It’s a juggling act,” she said in a CBC interview. The House aired Saturday. In addition to the costs of feeding and caring for her children, a low-dose chemotherapy treatment to treat stage 1 cervical cancer presents another challenge for the freelance writer.

Inflation in July was up 7.6% in July compared to the same period last year. It was the first month-to-month decline since 2021, but the cost of living continues to eat away at Anderson’s budget – and she’s hoping for help from politicians.

“They need to understand how the average Canadian lives. They offer benefits that they think sound good — things like one-time $500 rent assistance,” Anderson told host Catherine Cullen.

“If you’re in this area, it’s not going to do much to help you. It’s like two trips to the grocery store.”

Anderson hopes for more help as soon as possible.

The federal government this week announced new measures to address the affordability challenge, including the rental benefit Anderson described, as well as increased GST credits and a new dental benefit.

“These are things that will make a difference in people’s lives right now, but they are targeted enough not to contribute to an increase in inflation,” Prime Minister Justin Trudeau said.

Opposition Leader Pierre Poilievre, however, argued that the plan would “pour oil on the fire” of inflation. Derek Holt, Head of Financial Markets Economics at Scotiabank also criticized the government to pay more expenses.

No easy fixes for short-term pain

Trevor Tombe, an economist at the University of Calgary, said The House the recently announced measures were unlikely to have a significant effect.

But he noted that it could be difficult to tackle the fundamental problem of inflation quickly, so one of the things governments need to be honest about is to “clearly and explicitly acknowledge that there is no not much to do in the very short term,” he added. said.

Much of the inflation is caused by global factors and high energy prices, Tombe said, on which government spending or transfer policies can have limited impact. Rate hikes by the Bank of Canada will also take time to have an effect on inflation, Tombe noted.

Sean Speer, senior fellow at the Munk School of Global Affairs and former economic policy adviser to Stephen Harper, agreed that long-term planning is needed to comprehensively address the key challenges facing Canada today. .

“I don’t think we’ve heard enough from the government on short-term plans or to stimulate supply, but on larger long-term plans. There are so many areas where we find ourselves with constraints of supply: health care, housing, energy,” he said.

NDP claims victory over benefits announcement

Speer noted that Poilievre benefits from being ahead of the inflation issue, and that there could be a battle brewing over the federal carbon tax.

“While the purpose of the carbon tax is to increase prices over time, there has been in the past 12 months or so such a large increase in energy prices that it is likely to accelerate even more. the increases provided by the carbon tax quickly,” he said.

NDP Leader Jagmeet Singh said The House the new announcement — which he touted as a big win — will help ease costs for Canadians, easing the burden of dental costs while other prices remain high.

But he said dental insurance is only a temporary plan. He told The Canadian Press that his party would no longer be flexible with the government on this issue and expected a full program next year.

But Missy Anderson is looking for actions now rather than future promises.

“People have kids, people work hard every day and they can’t pay their bills. We need something to start happening.”