Tag Archives: Inflation

QP: Lying by omission about inflation drivers

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In light of the ugly inflation numbers released this morning, Question Period promised to be a gong show, and lo and behold, as things got underway, Pierre Poilievre led off in French, railing about so-called “inflationary deficits” as being the cause of what raised inflation, which is false. Justin Trudeau noted that some of the spending were investments in Canadians while still being fiscally responsible. Poilievre accused them PM of “printing money” which is a lie, and claims hr warned him about inflationary deficits and that they put oil on the inflationary fire. Trudeau said that what he took from that is that Poilievre is saying he wouldn’t have given people the “grocery rebate” or cut child care fees while the government did so while being fiscally responsible. Poilievre switched to English to decry headline inflation and demanded a balanced budget. Trudeau insisted that they helped bring down inflation while helping Canadians with groceries and child care while being fiscally responsible. Poilievre insisted that the government was not compassionate by loading on debt, and gave some specious math about inflation. Trudeau said that Poilievre was talking down Canadians and the economy, before patting himself on the back for cutting GST on rental constructing and stabilising grocery China. Poilievre went on a mendacious tear about “newly-printed money,” and worried about a mortgage crisis. Trudeau relayed that he met a mother in Oakville whose mortgage payments rose as much as her child care costs went down, which was good for her, but the Conservatives have made it clear that they wouldn’t do anything about child care.

Alain Therrien led for the Bloc and demanded that the government release $900 million in housing funds to Quebec, presumably without any strings. Trudeau noted the $4 billion housing accelerator fund and that they were working with the government of Quebec to ensure that it gets the most effect. Therrien claimed to be baffled by this, and Trudeau repeated his response. 

Jagmeet Singh rose for the NDP, and he railed that the government was only trying to “stabilise” grocery prices and not bring them down—clearly demonstrating he has no idea what he’s talking about. Trudeau mouthed the pabulum about working with the CEOs. Singh then raised the allegation of the assassination by Indian agents, and wanted assurances of safety for those being threatened. Trudeau spoke about the rule of law and the being more to do, but didn’t really answer.

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QP: Lying about the price of lettuce

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Before things could get underway, a whole batch of new MPs needed to be brought in to take their seats—Liberals Ben Carr and Anna Gainey, and Conservatives Arpam Khanna, Branden Leslie and Shuvaloy Majumdar. When things got underway in earnest, Pierre Poilievre led off in French, blaming the prime minister of causing “housing hell” and demanded action to fix it. Justin Trudeau recited some pat talking points about helping Canadians and calling grocery CEOs. Poilievre quoted John Manley in claiming deficits were driving inflation, and demanded the government end the so-called “inflationary deficits.” Trudeau read the talking points about helping to build more apartments while repeating his boast about the grocery CEOs. Poilievre repeated his first question in English, and this time Trudeau read some good-news talking points about the deal in London, Ontario, which was the first deal but not the last. Poilievre repeated his second question in English with an added factoid about housing starts being down, and Trudeau read some good-news talking points about Calgary agreeing to federal conditions for more dollars. Poilievre again demanded a balanced budget, and Trudeau accused him of empty slogans and cited his record of bungling housing when he was minister, and then recited some points about the policy convention votes.

Alain Therrien led for the Bloc, he demanded solutions and not “scapegoats,” and accused the government of withholding $900 million from Quebec. Trudeau praised their Accelerator Fund and removing GST on new apartments, but didn’t address the allegation. Therrien repeated the demand, and Trudeau said the Bloc are only there to squabble, and repeated his same pabulum points.

Jagmeet Singh rose for the NDP, and he railed that the government was not punishing grocery CEOs, to which Trudeau insisted that they were making corporations pay their fair share, and Trudeau again raised the meeting with the CEOs and upcoming changes to competition legislation. Singh switched to French to accuse the government of allowing a loss of affordable housing units under their watch, and Trudeau repeated his same points in French.

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Roundup: Open Letters to Tiff Macklem

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BC premier David Eby decided he needed to be extra performative yesterday, and wrote an open letter to Bank of Canada Governor Tiff Macklem, urging him not to raise interest rates next month because of the “human cost” of these interest rate hikes—ignoring of course the counterfactual of the effects of unchecked high inflation and the “human cost” that it has over the short and medium term.

What is pretty galling in all of this is that Eby knows better. He was once a pretty good civil liberties lawyer, and he fully knows that the Bank is independent, and that they have a legal mandate that they need to fulfil when it comes to keeping inflation at two percent, and that their main policy tool is the blunt instrument of interest rates. His “I know the Bank is independent but…” spiel was frankly embarrassing, and should not have merited the attention it got from the media, but here we are.

Speaking of, Power & Politics was not only true to form in giving him a soapbox to make his point, and rather than doing their jobs of pointing to the irresponsibility of this kind of move, particularly at a time when you also have Pierre Poilievre warning that he’s going to fire the Governor (with what power?) and threatening the Bank’s independence. It would be great if CBC could do a single economics story properly and not just treat it like an issue to be both-sidesed, but they apparently have zero willingness to do so, and the fact that this Eby interview was that ignorant is a sign that they cannot be bothered to care about economics stories for anything than just trying to plug them into their established narratives, and it’s doing the country an extreme disservice.

Programming Note: I’m taking the full long weekend off, so I’ll see you early next week.

Ukraine Dispatch:

Ukrainian forces have reported some success in the south and east, but I am also tickled by their latest video offering, telling all of those armchair generals to basically shut up because they’ve been doing the heavy lifting on their own. President Volodymyr Zelenskyy says that Ukraine has developed its own long-range weapons that can strike 700 kilometres away, which may have been a sly nod to the attack on Russian airbases that destroyed a number of fighters. The mayor of Kyiv wants to build more fortifications, because there always remains the threat from Russia.

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Roundup: Games of inflation denialism

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As opposition parties continued to shitpost about the inflation numbers and the interest rate decision, it got intensely stupid. To that end, Emmett Macfarlane has coined the term “inflation denialism” to characterise these kinds of responses, and he’s completely right about it.

https://twitter.com/emmmacfarlane/status/1681741904797466624

https://twitter.com/emmmacfarlane/status/1681743338532134912

https://twitter.com/emmmacfarlane/status/1681744204223979524

As well, economist Stephen Gordon has spent the day calling out “greedflation” theorists, and it was fun to watch.

Programming note: I am away for the next week and a bit, so blog posts are on pause until August. Behave in my absence, and don’t make turn this car around.

Ukraine Dispatch:

There was an early morning Russian strike on the port city of Mykolaiv that wounded 18. Russians have been targeting ports and grain infrastructure in particular in recent days, deliberately targeting it in Odessa, as well as Chornomorsk. Meanwhile, Russia pulling out of the Black Sea grain deal is worrying Ukrainian farmers, some of whom still have last year’s crop stockpiled because they couldn’t get it to market.

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Roundup: Inflation falling into the control range

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The inflation numbers were out yesterday, and headline inflation dropped to 2.8 percent annualized, which is the lowest in the G7, and back within the Bank of Canada’s control range of 1 to 3 percent (though they have stated they are going to keep measures in place it reaches two percent). There are still hot spots—food price inflation is still fairly high, and shelter costs are also running high, but that’s not unexpected given where things are at right now.

Chrystia Freeland called this news a “milestone moment” that Canadians should feel some relief in, while the Conservatives repeated some of their usual talking points. The NDP, naturally, are keeping up with their attempt to blame high inflation on corporate greed, particularly food price inflation, even though the data doesn’t really bear that out, as I pointed out in this thread:

Ukraine Dispatch:

Russian forces struck the southern port city of Odessa, and while most of the missiles and drones were intercepted, there were hits and there was damage from debris. This was considered to be retaliation for the explosion on the bridge linking Russia to occupied Crimea. More strikes are aimed at Odessa in the early morning hours. Meanwhile, with the Black Sea grain deal ended by Russia, the EU is looking to transport more Ukrainian grain by rail and road, while the UN says they are floating “a number of ideas” around how to get that grain flowing again.

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Roundup: Another rate hike, more nonsense talking points in response

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Not unexpectedly, the Bank of Canada raised interest rates another quarter point yesterday because inflation is becoming sticky, particularly in the core measures that they use to strip out the highly volatile measures like gasoline prices. If you read through the Monetary Policy Report, which shows the state of the global and Canadian economies, economic growth in Canada remains stronger than expected—too strong to tame inflation—and there is still too much demand in the system, particularly for services as opposed to goods, which is keeping those prices higher, as they are especially sensitive to the tight labour market. To that end, the Bank is now expecting inflation to last around three percent for most of the next year before finally getting back to the target of two percent, which is later than they anticipated because economic growth is still too strong.

Meanwhile, Pierre Poilievre continues to spout absolute nonsense about the causes of this inflation—it’s not government spending, and that isn’t indicated in the MPR anywhere—and lo, media outlets like the CBC simply both-sides his talking points rather than dismantling them. He’s talking about how he’s going to cut taxes, which would actually fuel inflation rather than do anything to tame it (and no, carbon prices are only marginally inflationary and cutting them would do nothing to slow it). And then there’s the NDP, who think that the Bank should lay off and instead use windfall taxes, as though “greed-flation” is what’s driving inflation (again, not indicated anywhere in the MPR). But as economist Stephen Gordon has pointed out, this kind of promise of painless measures to fight inflation are the provenance of quacks and faith healers. It won’t help, and it will make things worse.

Ukraine Dispatch:

It was a third consecutive night of Russian drone attacks directed to Kyiv, and falling debris has killed one person. Elsewhere, Ukrainian troops are reporting “some success” around Bakhmut.

https://twitter.com/kyivindependent/status/1679340673357557761

https://twitter.com/davidakin/status/1679031785764659201

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Roundup: May inflation shows it’s cooling faster

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Statistics Canada released the May inflation numbers yesterday, and they were well down from the month previous, the headline number now down to 3.4 percent, which is in line what the Bank of Canada is predicting about it returning to about three percent by the end of the year. Part of this is because year-over-year gasoline prices fell, meaning that there is a base-year effect in play, but food inflation remains high (in large part because of climate change affecting food-growing regions and the difficulty in getting Ukrainian grain to market continues to keep those prices high), and mortgage interest rates are one of the factors fuelling this. Unfortunately, you have certain economists like Jim Stanford who think that this is the Bank causing this inflation, when in fact if they hadn’t raised rates when they did, higher inflation would still be ripping through the economy. (Seriously, stop listening to Jim Stanford).

Additionally, these numbers continue to prove that Pierre Poilievre’s narratives about inflation are specious at best, but are pretty much bullshit he is squeezing into whatever the headline seems to be. Last month, when there was a 0.1% uptick in inflation, Poilievre blamed it on the news of the budget deficit, and that this was proof that the deficit was “pouring gasoline on the inflationary fire.” That was wrong, and the Bank of Canada said that the trend was that inflation was still decreasing (and that the government’s fiscal policy was not having an effect on that decelerating inflation). And lo, inflation is still decelerating, in spite of the budget deficit. It’s like Poilievre has no idea what he’s talking about.

Meanwhile, economist Stephen Gordon has a few thoughts the numbers.

Ukraine Dispatch:

Two Russian missiles hit the eastern Ukrainian city of Kramatorsk, killing four and destroying a cafe that was fairly well known. Meanwhile, a UN human rights report shows that Russian forces carried out widespread and systematic torture of civilians they detained before executing them, but also found that Russians troops detained by Ukrainians also alleged torture and mistreatment.

https://twitter.com/united24media/status/1673784944798191617

https://twitter.com/defenceu/status/1673769121450696724

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QP: The last big Poilievre/Trudeau show of the spring sitting

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The prime minister was present for what we all hoped was the final QP of the sitting. Hopefully. Some of the other leaders were present, but not others, which was very unusual for a Wednesday where they would normally use as many spots as possible for themselves.

Pierre Poilievre led off in French, and worried that some housing costs have doubled in Quebec, and blamed the prime minister and inflation (which is risible). Justin Trudeau said that if Poilievre was serious, he would support their policies like the housing accelerator fund, and working with municipalities to build more. Poilievre switched to English to worry that it would take twenty-years to save up for a down payment in Toronto, and again blamed deficits for this. Trudeau praised their job creation record and investments in growing the economy, before talking about his work with municipalities to build housing. Poilievre trotted out his “he’s telling people they’ve never had it so good” line and railed about housing costs, and again blamed the prime minister. Trudeau worried the Conservatives would cut the programmes that are helping Canadians. Poilievre insisted that the programmes were not working and blamed them for doubling housing prices, which again is laughable. Trudeau said that picking fights with mayors, like Poilievre is trying to do, would not solve the housing crisis. Poilievre worried that Trudeau says all the right things but doesn’t do them, and Trudeau insisted that he would take saying the right things as a vote of confidence.

Yves-François Blanchet led for the Bloc, and he worried about small companies suffering from the wildfires, and wanted to meet about implementing solutions, and Trudeau read a script about standing in solidarity with them, and promised to work with provinces through the summer. Blanchet insisted that they needed an immediate answer, and Trudeau insisted that they are working with the affected provinces.

Lori Idlout rose for the NDP, and she blamed the government’s inaction on intergenerational trauma with Indigenous people. Trudeau noted that today was a celebration of Indigneous languages and cultures while also recognise the sins of past and continuing the path of reconciliation. Idlout demanded action and not empathy, particularly with Grassy Narrows, and Trudeau insisted that they are working on that solution. 

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QP: Some half-hearted swipes around the by-election results

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The prime minister was present for one of the final Question Periods of the sitting, but his deputy was away in Toronto, and only a few of the other leaders were present. Pierre Poilievre led off in French, claiming that trust in democracy has been “shattered” and that he has been working with opposition parties about a public inquiry, but demanded the inquiry be declared before he shared names for who to lead it. Justin Trudeau read a script about working with stakeholders and opposition leaders about next steps in this issue. Poilievre then pivoted and cited a letter to the Journal de Montreal about someone losing their house, and demanded a balanced budget, as though there were a correlation. Trudeau patted himself on the back for the “tangible investments for families” with things like dental care. Poilievre switched to English to worry about household debt and again demanded a balanced budget. Trudeau acknowledged that Canadians are struggling which was why they have supports for them, while the Conservatives only promise cuts. Poilievre reiterated the story of the woman losing her house, trying to tie this to the deficit, which is false, and demanded a balanced budget yet again. Trudeau again reiterated that the Conservatives only proposed cuts while Canada has the lowest deficit and debt-to-GDP in the G7, and then took a swipe at Poilievre’s underwhelming by-election results. Poilievre again tried to tie housing and rental price increase to deficits, which is specious, and Trudeau again took a swipe at the by-election results before patting himself on the back for his positive vision.

Alain Therrien led for the Bloc, and as expected, he demanded a public inquiry immediately. Trudeau insisted that the opposition turned this into a partisan issue rather than taking this seriously. Therrien repeated his demands, and Trudeau repeated his same points about working to establish the next steps.

Jagmeet Singh rose for the NDP, and he worried about the rental prices in Toronto and blamed corporate landlords—never mind that this is an issue of provincial jurisdiction. Trudeau recited the housing measures that they have taken or are planning to take. Singh insisted that they were not acting with urgency and in French, noted that July 1st is Moving Day in Quebec and that families were under stress. Trudeau reiterated that they are there with projects and plans to help people.

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Roundup: By-election holds in all ridings

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There weren’t really any surprises in the by-election results last night, as both the Liberals and Conservatives held their respective seats. Both Liberals handily won their respective seats, getting over 50 percent of the votes in each riding, and they were a fairly close second in Oxford, but didn’t quite make it in the end with that seat. In Winnipeg South Centre, the fact that the Conservatives didn’t even crack 25 percent of the vote should be of concern to them, because this is the kind of riding they need to win if they’re going to form government, and they can’t. Again, in Oxford, the fact that the results were that close in a fairly safe Conservative riding should give them pause.

And then there’s Portage—Lisgar, and the big showdown with Maxime Bernier there, where the Conservatives wanted to “destroy” him. I’m not sure they succeeded, as the Conservatives got around 65 percent of the vote, and Bernier got around 17 percent, so I’m not sure it’s quite the “destruction” they had hoped for. It also came at a cost where they largely absorbed Bernier’s rhetoric in order to entice his votes to the Conservative party, but that is likely to have consequences, as they shift the Overton window ever further to the right, and far-right talking points become more mainstreamed.

Moving forward, expect each winner to visit their respective caucus meetings on Wednesday, and for Anna Gainey from Notre-Dame-de-Grâce—Westmount to make it into Cabinet in short order during the upcoming shuffle, because she’s one of the few people that Trudeau trusts, which is why the government has as many problems as it does.

Ukraine Dispatch:

Russia launched another large air raid overnight, targeting mostly Kyiv but also other cities but no casualties have been reported. In part this is because Ukraine has been building a three-stage defence system using the technology provided by Western partners. Meanwhile, the counter-offensive slogs on, with Ukrainian officials promising that the biggest blow is yet to come.

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