OTTAWA – Former Bank of Canada governor Stephen Poloz says government spending and incentives are not responsible for rising inflation.

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“I think it’s not right,” he said during an interview on Granthshala’s Question Hour, which aired on Sunday. “Indeed, what the stimulus did was to prevent the economy from going into a deep hole in which we would have experienced persistent deflation.”

According to the latest data released by Statistics Canada in October, inflation has reached 4.7 percent. The Bank of Canada expects it to peak later this year and begin to decline in late 2022.

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“We have to accept the fact that the policy [stimulus] The response was timely, well intentioned and it averted all the bad calls that people were making at the time,” he said.

In response to affordability concerns, the federal government has repeatedly referred to its national childcare program as a means to combat the high cost of living. Nine provincial and territorial governments have signed childcare deals with the federal government, while Ontario and New Brunswick have yet to sign.

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Karina Gould, Minister of Families, Children and Social Development, said in a separate interview that the inflation problem is not a specific Canadian issue and can be attributed to global supply chain problems.

Conservative finance critic Pierre Poiliver says the federal government’s fiscal spending is responsible for inflation.

The average inflation rate for Organization for Economic Co-operation and Development member states is currently 4.3 percent, but Polivar says the problem is only a global issue as a result of other central banks around the world taking a similar approach to Canada. fiscal stimulus.

“I think they are the countries that have done the best job of countering the downside risk that everyone was facing,” Poloz said. “Read a book or two about the Great Depression in the 1930s and realize what averted when we went through it.”

Poloz says that while governments may try to address affordability concerns in the short term, it typically takes a year or two for any government policy to have any effect on inflation.

But he expects housing inflation to persist and says rising costs may be something the federal government can address immediately.

“What they can do there is get all the levels of government together and figure out a list of things they should do to boost the supply of housing, we are clearly short of supplies and housing,” They said.