Can Liberals take credit for easing inflation?

Economic experts say global factors created the crisis and are now helping to solve it

- ALEX BALLINGALL

Finance Minister Chrystia Freeland hailed the June inflation rate, and the central bank's ensuing interest rate cut, and suggested it was connected to her handling of the country's finances. But five economists the Star interviewed suggest the government deserves neither blame nor credit for the rise and fall of inflation.

When inflation was spiking and straining budgets after the worst months of the COVID-19 pandemic, the Liberal government was eager to blame the pain on factors outside its control.

“I am impressed to see the high esteem in which the member for Carleton seems to hold me, that I was able to create a global inflation crisis,” said Prime Minister Justin Trudeau during a typical exchange with Conservative Leader Pierre Poilievre in the House of Commons on Nov. 24, 2021.

Now, almost three years later, inflation has slowed. The year-over-year rate posted in June was 2.7 per cent — far below the recent surge’s peak of 8.1 per cent in June 2022. The Bank of Canada, which had responded to rising prices by cranking up interest rates to levels not seen in years, has started lowering them again, proffering hope for mortgage holders and others who saw increased debt payments added to their recent affordability woes.

And wouldn’t you know it, here come the governing Liberals to take credit for this sunny turn in monetary affairs.

Finance Minister Chrystia Freeland hailed the June inflation rate, and the central bank’s ensuing interest rate cut, and suggested it was connected to her handling of the country’s finances.

“Our responsible economic and fiscal plan is working,” Freeland wrote on X.

A Liberal party fundraising email distributed last week made the same claim. “Our plan is working: inflation and interest rates are coming down while we invest in Canadians and grow the economy,” boasted Citizens Services Minister Terry Beech.