By Sheila Copps
First published in The Hill Times on July 17, 2023.

OTTAWA—According to Albert Einstein, the definition of insanity is doing the same thing over and over again and expecting different results.

Someone should tell that to Bank of Canada Governor Tiff Macklem. The bank has hiked interest rates 10 times since March of last year.

Instead of cooling the economy, the action simply hits workers harder. The Canadian economy continues to expand, with 60,000 new jobs added last month. Companies continue to face a worker shortage, forcing employers to increase their wage offerings in the hunt for employees. That is not a bad thing.

But hiking interest rates increases costs and depresses wages. Macklem insists his monetary policy is working, but he cannot say whether or not last week’s rate rise will work, calling for patience to see whether the actions succeed in reining in inflation.

Patience may be fine for those managing the money markets, but what about ordinary citizens on the verge of losing their homes because of the hike in interest rates?

The moves are fodder for New Democratic Party Leader Jagmeet Singh, who says these interest rate hikes are simply making things worse for workers and businesses. Singh is calling the current situation “greedflation,” and he blames the problem on greedy CEOs who are using the inflationary crisis to make more profit and gouge consumers. He says the government has to take another approach to tackle the current inflationary spiral.

Singh says supply chain issues, the war in Ukraine, and the cost of housing and groceries are responsible. None of these factors will be affected by interest rate increases. Only the pocketbooks of ordinary Canadians are touched.

Singh’s criticisms enjoin the year-long campaign of Conservative Leader Pierre Poilievre, who started calling for the firing of the Bank of Canada governor during his run for the party leadership. However, Poilievre’s financial acumen took a hit when he also suggested that Canadians should invest in cryptocurrency because it allows them to escape the inflation being created by the central bank.

Leadership opponent Jean Charest attacked Poilievre’s firing promise, and then Conservative finance critic Ed Fast stepped down from his post, claiming, “I’m deeply troubled by suggestions by one of our leadership candidates that the candidate would be prepared to interfere already at this stage in the independence of our central bank.”

That statement was made more than a year ago, but the continual climb in interest rates has started to create political pressure from both the right and the left. Singh is not calling for Macklem’s resignation, but he is asking for a change in the bank’s conventional approach to fighting inflation.

With complaints from both sides, the government is going to face some real pressure to pivot financially. Liberals can’t afford to fight inflation and an election. However, the fact that the Federal Reserve in the United States is expected to raise rates slightly at the end of the month could blunt criticism of the Canadian situation.

At the end of the day, ordinary Canadians are feeling the pinch at the grocery store and in the housing market. The cost of rental accommodation is skyrocketing across the country, and the path to home ownership for many is blocked by the high cost of mortgages.

Macklem is not the only central bank governor using interest rates as a blunt instrument, and if there is another route, it must be determined by the government, not the bank governor.

With grocery profits in the eye of the storm while prices seem to increase weekly, more needs to be done in that area. The recent price-fixing decision of the Competition Bureau, issuing a $50-million fine against Canada Bread, was a good first step.

But that money should go back to those Canadians who paid excessive prices for years.

Likewise, the bureau can do more, including speeding up the length and breadth of its investigations into price-gouging. The bread investigation took seven years and involved immunity to Loblaw Companies for revealing its part in the scheme. On average, the Competition Bureau found that Canadians paid $1.50 extra for bread products for the past eight years because of the collusion.

There are undoubtedly other food groups and other consumer items that face a similar lack of competition because of price-fixing. A move to strengthen the budget and investigative strength of the Competition Bureau would be a good place to start.

Firing the bank governor is not the answer. But doing something to stop price gouging would be a good start.

Sheila Copps is a former Jean Chrétien-era cabinet minister and a former deputy prime minister. Follow her on Twitter at @Sheila_Copps.

If he doesn’t connect with the truckers who are promising weeks of disruption, he runs the risk of being outed as a non-supporter. If he does stand with the truckers, he runs the counter-risk of facing the ire of citizens in the Ottawa region, including those in his own Ottawa riding, Carleton.

By Sheila Copps
First published in The Hill Times on June 27, 2022.

OTTAWA—Pierre Poilievre’s Canada Day celebrations may blow up in his face.

If he doesn’t connect with the truckers who are promising weeks of disruption, he runs the risk of being outed as a non-supporter.

If he does stand with the truckers, he runs the counter-risk of facing the ire of citizens in the Ottawa region, including those in his own Ottawa-area riding, Carleton.

They handed him a healthy plurality in the last election but just last week, Mainstreet Research published some interesting data about how the trucker-Pierre tango was viewed by voters.

Amongst 555 constituents polled by Mainstreet between June 13-14, Poilievre enjoyed a healthy 10 per cent majority over his closest opponent in the last election.

If that same election were held today, Poilievre would still be in the lead, but his margin of victory would shrink by half.

According to respondents, the single biggest factor in their dissatisfaction was Poilievre’s support for the Ottawa convoy blockade.

Forty-nine per cent of those polled said they would be less likely to vote for the Conservatives if the riding representative was Poilievre.

It appears as though the trucker occupation played a huge rule in Poilievre’s fall from electoral grace.

The Mainstreet question was clear: “During the trucker occupation … Pierre Poilievre met with and encouraged the freedom protesters. How has this impacted your opinion of your Member of Parliament?”

Fifty-six per cent of those interviewed said they had a “much less favourable” opinion of Poilievre because of his blockade support. An additional 10 per cent said they had a “somewhat less favourable opinion.”

By contrast, only 15 per cent said they had a “much more favourable” opinion, while three per cent claimed a “somewhat more favourable” opinion.

In the next month, the truckers have vowed to return to Ottawa to disrupt Canada Day and remain in the capital throughout the month of July.

They may be pleased to return to the scene of the crime, but Poilievre and the Conservatives can’t be too thrilled.

So far, Poilievre’s support of the truckers has not made much news beyond the nation’s capital.

It really is an “inside the beltway story.” But inside the beltway is Poilievre’s own constituency, and he could vault to the top of the Tories, only to be spurned by local voters in the next election.

Most party leaders are supported by their constituents. It is only when the party faces dire straits that the leader is defeated. Witness the rejection of Liberal Leader Steven Del Duca in his own riding the recent Ontario election.

But being a representative in the nation’s capital is not the same as other ridings across the country.

There, people do expect you to stare down the Freedom Convoy and support the residents, not vice versa.

Last January and February were brutal times for the 30,000 people who live in Ottawa’s downtown core.

According to a friend who lives there, the only dialogue that happened between truckers and residents was a volley of epithets that started with “f” and ended with “u.”

The city is bracing for the same nastiness next week. And Poilievre has to make up his mind whether he represents his constituents or the freedom convoy, because, if the Mainstreet poll is accurate, it cannot be both.

It remains to be seen whether Poilievre can translate his obvious internal popularity into votes across the broad spectrum of Canadians.

But the early signal from his riding sounds a warning bell.

Swinging so far right may win support within Conservative party circles.

But that swing also alienates the majority of mainstream voters.

With the crash of crypto-currency and the pushback on his view of the governor of the Bank of Canada, Poilievre appears to be resonating within his own party.

His situation is so strong that, not only did Patrick Brown’s co-chair bolt, as referenced in last week’s column, but also Brown’s campaign manager quickly followed Michelle Rempel Garner, abruptly leaving Brown’s campaign to work for her potential Alberta leadership entry. Rempel Garner has since decided not run for the UCP leadership.

Jean Charest continues to insist publicly that “I will win this.” He is pumping up his supporters with audacious declarations of victory. But his own numbers do not appear to back up those words.

Poilievre and Brown membership sales allegedly amount to 75 per cent of the total, so it is tough to see how Charest will win.

Poilievre is definitely ahead.

How he handles the Canada Day convoy will signal much about his capacity to win an election.

Like Icarus, flying too close to the truckers might burn him badly.

Sheila Copps is a former Jean Chrétien-era cabinet minister and a former deputy prime minister. Follow her on Twitter at @Sheila_Copps.