The numbers are in: Canada’s annual inflation for 2021 was 4.8%, the highest rate since 1991. Even excluding gasoline from the calculation, inflation is 4%, which is double the Bank of Canada’s current target of 2%.
It’s time to take the problem of inflation seriously. Two solutions are required. It is imperative that the Bank of Canada raise its different interest rates to cool the overheating economy. Moreover, it must end its quantitative easing program, through which it has created over $5 billion a week since June 2020, mainly to purchase federal government bonds. With the US Federal Reserve starting to admit that the current inflation is not transitory, it’s time for its Canadian counterpart to do the same and take concrete steps to fight inflation, in accordance with its mandate.