Four options to counter inflation

OTTAWA | Food, petrol, housing, transport… the prices of all products and services rose in December, reigniting the debate on the role of government in the fight against inflation. The Conservatives continue to blame Justin Trudeau and demand a plan to help families, while the Liberals push the problem into the court of the Bank, which controls interest, the main weapon to counter inflation. They are focusing on child care spaces and affordable housing to help families. But other options exist. Overview.

strategic oil

In November, the United States and other countries, including China, India and Japan, agreed to release some of their strategic oil reserves in an effort to drive down the price of black gold. , one of the key drivers of global inflation.

Canada did not participate in this initiative because although it has the third proven oil reserves in the world, it does not have a strategic reserve that it can draw on in the event of national necessity.

As early as 2018, the Parkland Institute at the University of Alberta called on the federal government to remedy this situation to reduce the vulnerability of Canadians to international oil shocks.

Encourage competition

During the election campaign, the Conservative Party said it wanted to tackle rising prices by increasing competition. In particular, it proposed a strict code of conduct aimed at protecting suppliers and encouraging competition between grocery stores. He also wanted to reject mergers to prevent big companies from dominating sectors and inflating costs.

This is an avenue that the Biden administration is trying to take in the United States. The Democratic president, for example, wants to restore competition in the meat sector, dominated by four large companies that control 85% of the American market.

In Quebec, the Minister of Agriculture, André Lamontagne, wants the big players in the chicken industry to make room for the smaller ones. Currently, more than 96% of chicken slaughter quotas are concentrated in the hands of Exceldor and Olymel.

Boost production

“The most exorbitant increases are not for the products we buy abroad. It is for products that we have here in Canada, ”was worried this week the curator Pierre Poilièvre.

He thus denounced the government’s argument that inflation is mainly the result of disruptions in the international supply chain.

Mr. Dibb indicates that the state can play a concrete role in increasing the supply of national products by supporting businesses more. “Perhaps the companies do not have the human and financial capital to increase production, perhaps the taxes on the import of raw materials are too restrictive”, he illustrates, calling for an analysis of all the links in the production chain in order to act on the flaws.

Support the less fortunate

George Dibb, of the Center for Economic Justice (IPPR), an independent think tank based in London, England, warns against withdrawing pandemic aid too quickly from the poor, as England has done Wrongly, he says. He points out that although the job market has recovered, the less fortunate are now facing rising prices and therefore still need support.

With this in mind, the New Democratic Party opposed Bill C-2 on pandemic aid, because it wanted to maintain a universal benefit such as the CERB or the PCRE. But the British economist pleads instead for targeted aid for those who need it most. This is the strategy adopted by the Minister of Finance, Chrystia Freeland.

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