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Dear John,
Even before the COVID lockdowns in 2020, the federal government was already spending at record-high levels.
When COVID hit, that spending increased even further, while the Bank of Canada lowered interest rates to near zero.
These two decisions — to dramatically increase government spending and lower interest rates — helped trigger the high inflation rates Canadians are seeing today.
In response, the Bank of Canada increased its policy interest rate to discourage consumer spending and cool price increases. But the federal government has continued to increase deficit-financed spending.
A new study published by the Fraser Institute today finds that until the federal government shows some spending restraint, Canadians may continue to face higher prices for goods and services.
Read the full study here, and be sure to share this one with your friends and colleagues.
Sincerely,
Niels Veldhuis
President
The Fraser Institute
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