Peter Shokeir | [email protected]
The pandemic has inflicted a heavy toll on society, whether it’s loved ones who were lost, those who suffer from long COVID or businesses that have closed.
Inflation is another cost that isn’t quite so terrible but still impacts people’s lives.
According to Statistics Canada, the price of food rose by 9.7 per cent between April 2021 and April 2022.
Besides food, the most affected areas for Canadians are transportation, shelter and household operations.
There are various reasons why prices are rising—the war in Ukraine, supply chain issues, labour shortages—but the reckless creation of money has no doubt played a role.
The pandemic was going to hurt the economy one way or another, and public spending was necessary in order to get people through this crisis.
That doesn’t mean all the spending was warranted or can’t be critiqued.
Consider the $12 million in CERB payments going to applicants with foreign addresses (who are not eligible for this program) or more than $636 million in CERB payments going to 300,000 underaged teens, many of whom arguably don’t need that money.
An additional $600 million was used on a pointless snap election.
Down south, the Trump and Biden administrations have spent trillions on the pandemic.
Even if some of this spending can be justified, governments relied too much on creating money out of thin air rather than taxing the wealthy and middle class.
Perhaps they could have tried issuing debt securities, similar to war bonds.
After all, politicians such as Jason Kenney went out of their way to draw similarities between COVID and World War II, so why not apply that logic to finance?
Instead, inflation will act as a “hidden tax” that hurts low-income families the most.
Throughout this crisis, leaders across the political spectrum have proven their ineptitude on multiple fronts, and it’s no different when it comes to finance.
As our prime minister said last year, “You'll forgive me if I don't think about monetary policy.”
If there is any silver lining to this situation, it’s that people have become wiser about the machinations of politics and more skeptical of lofty promises.
Let us just hope that results in a better crop of leaders down the road.
