Trudeau says monetary policy not a priority

Prime Minister Justin Trudeau said he doesn’t believe monetary policy will be a top priority for his government after the Sept. 20 election, prompting criticism from his Conservative rivals.

At a campaign stop in Vancouver, Trudeau was asked whether he would support altering the Bank of Canada’s inflation-fighting mandate to allow it to tolerate somewhat higher prices, as the U.S. Federal Reserve has done. The central bank tries to keep inflation close to 2 per cent, and its target comes up for review every five years.

The next renewal is due later this year, but Trudeau indicated it was not a major preoccupation for him.

“When I think about the biggest, most important economic policy this government, if re-elected, would move forward, you’ll forgive me if I don’t think about monetary policy,” Trudeau said.

“You’ll understand that I think about families.”

The comments came on the same day Statistics Canada said inflation hit 3.7 per cent in July, one of its highest readings over the past two decades and the fourth straight month outside the central bank’s 1 to 3 per cent control range.

“The simple fact is that Justin Trudeau has made life less affordable for Canadians,” Conservative Leader Erin O’toole said in a statement. “Regular Canadians are struggling to make ends meet.”

Bank of Canada Governor Tiff Macklem has warned against overreacting to the “temporary” spike in prices.

But if he’s wrong about the transitory nature of the price increases, the central bank could be forced to hike interest rates earlier than analysts are anticipating — unless the government provides a fresh mandate that grants it more flexibility.