Yes.
Evidence of meeting #112 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was spending.
A video is available from Parliament.
Evidence of meeting #112 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was spending.
A video is available from Parliament.
5:55 p.m.
Liberal
Yvan Baker Liberal Etobicoke Centre, ON
As prices have risen, the Government of Canada has taken certain initiatives to help folks with this problem of rising prices. Part of those are around doing what government can to address the underlying causes.
To the extent we can, we're showing tremendous support for the Ukrainian people in their fight in the war. We've tried to take the steps we can to unwind some of the supply chain bottlenecks, because the government can do that, but we also, perhaps more notably, have provided supports to people, especially the most vulnerable people in our society, with programs to help them with the cost of living, with things like the ones we talked about today, such as child care or dental care or a grocery rebate or things like that.
Notwithstanding that, what I've heard you say today is that up until today, government spending has not contributed to inflation. Is that correct?
5:55 p.m.
Governor, Bank of Canada
What I said is that if you look at government spending over the last year, it has not been getting in the way of getting inflation down.
5:55 p.m.
Liberal
Yvan Baker Liberal Etobicoke Centre, ON
Thank you.
Inflation is caused by global forces and domestic forces. It is affecting countries around the world, so the cost-of-living challenges that Canadians feel are being felt to a great degree, if not to a greater degree, in other countries, and government spending over the last year has not contributed to inflation. That's what I'm hearing.
So far, is that correct?
5:55 p.m.
Liberal
Yvan Baker Liberal Etobicoke Centre, ON
Thank you.
One of the questions you were asked by a colleague here at the committee was about the impact of eliminating the price on pollution or the carbon tax, and I think you estimated that there would be a one-time benefit of 0.6% on prices.
Is that correct?
5:55 p.m.
Liberal
Yvan Baker Liberal Etobicoke Centre, ON
It would be a one-time reduction of 0.6% in prices. Thank you.
Could you speak to what the costs, economic or otherwise, could be of not acting on climate change?
5:55 p.m.
Governor, Bank of Canada
Climate change is not in the Bank of Canada's mandate. Climate change is already a force, and it's only going to become a bigger force on the economy.
Our mandate is to control inflation, and in order to do that we're going to have to understand the effects of climate change. There are two kinds of effects. There are the physical effects. I think those are what people are seeing—the experiences, whether forest fires or floods or extreme storms. Those are disrupting people's lives. They're disrupting economic activity, and we need to understand how that affects the economy.
Then there's the transition. We're going to transition to net-zero emissions. That's going to affect almost every sector of the Canadian economy. You're going to have to see large investments in more renewable types of energy. That's a big transition that's going to have a variety of effects. It's going to add new costs and it's going to create new opportunities, so again we need to understand how those things are going to affect the economy and what the implications are for inflation. We're really just at the very beginning of that, but climate change policy is very much in the hands of governments, which is where it should be.
6 p.m.
Liberal
Yvan Baker Liberal Etobicoke Centre, ON
Earlier, the senior deputy governor alluded to the fact that the forest fires caused a 0.5% reduction in GDP in the last quarter. Did I get that correct?
6 p.m.
Liberal
Yvan Baker Liberal Etobicoke Centre, ON
It was in the second quarter.
We understand, of course, that as the climate changes, it increases the likelihood and intensity of some of these extreme climate events like forest fires.
To me, this gives us an indication of the degree of magnitude of economic impact that we are going to be facing and the consequences we'll face if we don't act on climate change.
I want to thank you for your presence here today.
6 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you.
Thank you, MP Baker.
MP Blaikie, do you have your hand up?
6 p.m.
NDP
Daniel Blaikie NDP Elmwood—Transcona, MB
Yes. I have just a quick question.
I wonder if the governor might follow up in writing just to say whether the 0.6% reduction in inflation assumes no corresponding price increase.
6 p.m.
Liberal
The Chair Liberal Peter Fonseca
I have another hand up.
Listen, we have to end this meeting. We've reached finish line of this very fine session here—
6 p.m.
Governor, Bank of Canada
There are no other secondary effects. It is just a pure, direct calculation.
6 p.m.
Conservative
Jasraj Singh Hallan Conservative Calgary Forest Lawn, AB
I just wanted to see if the committee could get an update on the report that was supposed to be tabled about the motion passed last week, minus the support from Liberals, that wanted the Minister of Finance to reject the HSBC-RBC report. Do you have a date for when that would be tabled in the House?
6 p.m.
Liberal
6 p.m.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
On a point of order, have they scheduled Chrystia Freeland?