The head of Canada’s largest private sector union said Monday that Bank of Canada Governor Tiff Macklem is waging “class warfare” against workers and it’s time to stop raising interest rates .
“Instead of developing a tailored response aimed at curbing profits, stopping profiteering, solving supply chain bottlenecks and helping workers keep up, policymakers have taken the blame for workers, including the governor of the Bank of Canada, who has basically declared class war on workers. working people in this country,” said UNIFOR President Lana Payne.
UNIFOR represents more than 300,000 employees.
Payne said shareholders and company executives are reaping “obscene profits in the form of higher dividends, share buybacks and bonuses” while workers struggle with high inflation.
“The medicine that the Bank has, in terms of inflation, is causing a lot of pain,” Payne said.
“The fact is that the Bank of Canada has raised interest rates faster than many other countries in the world. We should be asking ourselves, is it really doing what it says it is doing?”
Canada’s benchmark interest rate currently stands at 3.75 percent. In the United States it is 4 percent, while it is 3 percent in the United Kingdom and 2 percent in the European Union.
Payne, the Bank of Canada is continuing its plan to raise interest rates even as inflation falls.
“This seems like unnecessary pain for people working right now in Canada,” Payne said, adding that interest rates “are high enough right now. We have to put a stop to that.”
In a recent interview with CBC News, Macklem said that while the rate hikes are making life difficult for many Canadians, they are necessary.
“We don’t want to make it harder than it has to be,” he told the CBC’s Peter Armstrong. “But at the same time, if we don’t do enough, if we’re half-hearted, Canadians will have to continue to endure the high inflation that hurts them every day.”
Low unemployment and inflation
Analysts say that if the bank stops too soon while inflation is still rising, it will have to take even more aggressive measures in the future. On the other hand, if it overshoots and keeps raising rates after inflation starts to fall sustainably, many Canadians will suffer needlessly.
While Payne said he believes the bank should hold off on further rate hikes, Macklem disagrees.
“We think more increases are needed, but we’re getting close to the end of this tightening cycle. I can’t tell you exactly what that is,” he told Armstrong. “We’re not there yet, but we’re getting closer.”
Payne also criticized Macklem for comments he made last week at the Public Policy Forum in Toronto, when he said the current low unemployment rate is not sustainable.
“Blaming workers for having jobs and demanding decent wages, benefits and working conditions is simply unacceptable. We need an economy that works for everyone, not one that only benefits the few,” he said.
Macklem said last week that while a record low unemployment rate means more people are working, it also means employers are struggling harder to fill positions.
“The tightening of the labor market is a symptom of the broader imbalance between demand and supply that is fueling inflation and hurting all Canadians,” he said, adding that “relieving labor market pressure will help restore price stability”.