Monetary policy is about families
If there were ever proof that this election is Justin Trudeau’s to lose, the Liberal leader reaffirmed it this week with another classic footin-mouth moment. When asked by a reporter about whether he would support altering the Bank of Canada’s inflation-fighting mandate to allow for higher prices, as the U.S. has done, Trudeau offered this gem of a response:
“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. You’ll understand that I think about families.”
Unpacking the stupidity of this statement could take the rest of this column, but here’s the Coles notes:
Monetary policy involves setting inflation targets. Higher inflation lowers families’ purchasing power.
O’TOOLE WANTS TO CHANGE THE CHANNEL ... TO INFLATION RATES. — KHEIRIDDIN
Lower purchasing power means less money for groceries, rent, mortgages, gas, clothes and everything else families need. Inflation hit 3.7 per cent in July, one of its highest readings in 20 years; this is also the fourth straight month the rate exceeded the Bank’s 1 per cent to 3 per cent mandate. That mandate is set by the federal government, and is up for renewal later this year. In other words, thinking about monetary policy is thinking about families, and the prime minister is in a position to do something about it. If he understands how it works, that is.
Cue the outrage by the Conservatives, who were already on the anti-inflation train. “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.” The Tories also released an online ad headlined “It’s the Prime Minister’s job to think about monetary policy — Monetary policy has a direct impact on the cost of living.”
It’s no surprise that O’toole wants to change the channel from immunization — an issue which the Liberals are attempting to use as a wedge against the Tories — to inflation rates. An Angus Reid poll out today shows that voters who are worried about economic issues place more trust in the Tories than in their opponents. Of the 58 per cent of respondents who describe themselves as “anxious” about the economy, 39 per cent report the Conservative party as their first choice, greater than any other party. An earlier Abacus survey found that the cost of living is the No. 1 issue this election for all three major parties, with 62 per cent of respondents overall ranking it a top-ten concern.
No surprise then that NDP leader Jagmeet Singh also took advantage of Trudeau’s slip. Campaigning in B.C., where housing prices continue to climb, Singh flogged his housing-affordability policy, including a 20 per cent tax on foreign buyers and a pledge to create 500,000 homes “that are within people’s budget.” Singh said: “The reality is, over the past six years, things have just got so much worse. People cannot find a home that’s in their budget,” Singh said in a campaign stop in Burnaby. “One of the big reasons why this is happening is because Justin Trudeau has let this happen.”
Will Trudeau’s gaffe be in the same league as another infamous campaign fail, that “an election is no time to discuss serious issues”? That quip helped sink Progressive Conservative prime minister Kim Campbell in the 1993 election. The NDP had accused Campbell of seeking to reform social programs without provincial consultation; Campbell said she only meant that 47 days were not enough to tackle such serious issues.
This time around, all leaders have a scant 35 days to score their points, in an atmosphere of pandemic uncertainty and financial anxiety. If the opposition succeed in dragging the Liberals onto economic terrain, and attacking from both the left and the right on issues of affordability, their incumbent advantage could melt away.
While one faux pas may not be as fatal, Trudeau can’t afford to make more mistakes in an election that is his to lose.