HomePoliticsInflation: Feds’ 'affordability plan' not new, says economist

Inflation: Feds’ ‘affordability plan’ not new, says economist

To help Canadians deal with rising inflation, the federal government has pointed to measures already rolled out in April’s budget, as well as previous ones.

However, one economist says officials could have rolled out new policies that would have a greater and more immediate an impact on families.

David MacDonald, senior economist with the Canadian Centre for Policy Alternatives, told CTV’s Your Morning the measures highlighted during Thursday’s speech from Deputy Prime Minister and Finance Minister Chrystia Freeland will “certainly help” some Canadians, but noted that the measures themselves are not new.

“The bigger ticket items were actually introduced two budgets ago and have already come into place,” MacDonald said Friday.

“In some ways, this is a review of things that they plan to put in place not for inflation necessarily, it will certainly help folks in those circumstances, but it’s not anything new.”

Freeland presented a multi-pronged “affordability plan” on Thursday, outlining how the government intends to address inflation, based on pre-existing commitments.

The measures, totalling $8.9 billion in spending this year, include planned boosts to certain benefit programs such as the Canada Workers Benefit, as well as the federal government’s child and dental care plans. Freeland also cited “respect” for the Bank of Canada, fiscal restraint, and creating “good jobs,” as measures that will help steer the economy through the current turbulence.

MacDonald said Thursday’s speech could have been used by the federal government to roll out new policies to better help curb the impact of inflation. Some examples he suggests include a one-time transfer to everyone who receives a particular federal benefit – much like what the federal government did with GST during the pandemic – as well as introducing a rapid formula to get these pre-existing commitments into Canadians’ pockets sooner.

“Unfortunately, none of those measures were put into place so it’s a bit of a missed opportunity,” he said.

However, MacDonald noted it is worth pointing out that all federal income transfer programs are indexed, meaning they will increase to adjust for inflation. But he said there are often delays in when that adjustment comes into effect.

When it comes to the Old Age Security pension, for example, MacDonald said the delay is about three to six months between the time inflation occurs and actual transfers increase in people’s bank accounts. But for other benefits, it could be longer.

“For the other transfers like child benefits for instance, a delay can be upwards of a year and so folks will have to wait until 2023 to see an increase in those benefits,” he explained.

Watch the full video from CTV’s Your Morning at the top of this article to hear more about what impact these measures will have on rising inflation for Canadians.



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