What I didn't say in my testimony is that there is a protected class. MPs are actually part of it. You have indexed pensions. Federal employees have indexed pensions. Most people don't. So for people who don't have indexed pensions, a long period of high inflation is extraordinarily stressful and destructive. Debtors do benefit from surprise inflation. At the moment, one of the big questions—and it relates to the earlier question about transitoriness—is, if inflation continues, how much is it a surprise? At the moment, long-term interest rates are quite low, but they are rising. Something that concerns me about the current episode is that if inflation expectations start to rise and we start to see that feeding through into long-term interest rates, it will get harder for the Bank of Canada to bring inflation back down. If people are still expecting 2% over the long run, then it's not that jarring a change, but once people have started to build increases of 4%, 5%, 6% or more into their wage and pricing plans, getting inflation down gets a lot more painful.
On March 21st, 2022. See this statement in context.