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McCallum: Inflation mitigation measures should be targeted and temporary

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OTTAWA – Canadian Governor Tiff McCallum says governments that want to alleviate Canadian inflation should opt for measures that are well-targeted and temporary.

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At a House of Commons committee meeting on Wednesday, Conservative MP Adam Chambers asked the governor which of two options was a better way to deliver aid without fueling inflation: direct transfers to low-income Canadians or energy aid packages. .

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In response, the governor said that targeted and temporary measures tend to raise inflation less than broad measures.

“Policies really need to be aimed at reducing the impact of inflation on citizens who are most vulnerable and temporary when this is an inflationary problem,” McCallum said.

The federal government, along with provincial governments, has responded to high inflation with the aim of cushioning the blow to Canada’s finances. While some measures target low-income people, others are broad-based.

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The federal government recently temporarily doubled the GST exemption, a benefit that goes to low- and modest-income Canadians.

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Counties have also provided relief, with many opting to send checks more widely.

Most recently, Alberta Premier Danielle Smith announced measures to ease inflation on Tuesday, including payments of $600 per child for families earning less than $180,000 a year. The same income limits and allowances apply to seniors.

McCallum, along with Senior Deputy Governor Carolyn Rogers, answered questions from MPs on the House of Commons Standing Committee on Finance.

Bank of Canada executives faced questions about the central bank’s policy decisions in the face of decades of high inflation.

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In October, annual inflation stood at 6.9 percent, down from a peak of 8.1 percent in June.

Since March, the Bank of Canada has hiked rates six times in a row and is expected to announce another rate hike in December.

The central bank aims to reduce spending in the economy by increasing the cost of borrowing for Canadians and businesses.

A significant economic recession is expected to lie ahead as higher interest rates work their way through the economy. However, many economists remain cautiously optimistic that even if Canada slips into a recession, it will be short-lived.

Source: torontosun.com

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