Many Canadians are too young to remember the high interest rates of the 1980’s. Others remember those days all too well. The days when the price of the average Canadian home was well under $100,000—a dream for many prospective homebuyers today—but interest rates topped 19%. In the early 1980’s the mortgage payment for a $189,000 home was roughly $2200 per month—half the price but double the payment from today.
There were numerous factors that contributed to the high inflation/interest rates of the 1980’s but one of them was that during the 1970s Pierre Trudeau tripled government spending, running large deficits.
Fast forward forty years and we are on the brink of a “like father, like son” repeating of history.
While interest rates are unlikely to ever again rise to the levels of the 1980’s, a simple trip to the grocery store is enough to tell us that inflation is alive and well in Justin Trudeau’s Canada—inflation that will only get worse if Canada stays on its current financial track.
Anyone who has been to the grocery store lately, let alone bought a new home—or for that matter a sheet of plywood—will tell you the cost of living in Canada has shot up dramatically in the past year while the buying power of their dollar has shrunk.
This inflation is a direct result of the hundreds of billions of deficit dollars the Liberal Government is pumping into the economy, and their failure to target stimulus money to engines that drive economic growth.
Long before anyone had ever heard of COVID-19, Conservatives were sounding the alarm bell about the state of Canada’s finances under Justin Trudeau and the Liberals.
Our previous Conservative Government handled the worst financial crash since the Great Depression, came out the other side in better shape than any other G-7 country and, a mere six years later, left the incoming Trudeau Government a balanced budget.
Instead of building off our success, the Liberals raised taxes and took on debt to pay for their out of control spending.
It took decades to clean up Trudeau senior’s fiscal mess. Just in time for Trudeau Junior to come on the scene and wipe out that work with a debt mess of his own.
By 2019, nearly half of Canadians were already within $200 a month of not being able to pay their bills or service their debt.
Today, because of government COVID-19 emergency programs and benefits, many Canadians are—in a sense—doing better, financially, than ever before. But government programs cannot be sustained at the current level, and the levels of debt the Liberals have taken on to pay for them is serving to devalue the buying power of those dollars.
As a result, coming out of COVID, these new increases to the cost of living will be financially crippling for many families.
To make matters worse, the most obvious cure for inflation is for the Bank of Canada to raise interest rates—a move that some economists already see as long overdue.
There is a reason that Conservatives are forever harping about debt and deficits.
Despite the governing philosophy of the new political left, you cannot borrow/print money and spend your way into prosperity. That’s not how life works.
Canada’s Conservatives understand the kitchen table issues facing Canadian families in a way Justin Trudeau never could.
We have a plan to secure Canada’s economy, and to balance the budget within ten years.
We’ve done it before, and we can do it again.
We have to do it, before it’s too late.