Bank of Canada determined to push the economy into a recession, no matter the impact on Canadians

October 25, 2022

Bruske: Workers cannot keep paying the price the Bank of Canada is imposing. A recession would mean thousands of Canadians thrown out of work and downward pressure on wages.

OTTAWA –– Today’s decision by the Bank of Canada to further raise interest rates will have devastating effects on the working people who drive our economy. 

“With corporate profits at an all-time high, workers and their families are still being forced to bear the burden of the Bank’s singular focus on driving down inflation with aggressive rate hikes,” said Bea Bruske, President of the Canadian Labour Congress. “The Bank of Canada is determined to push the economy into a recession, no matter the impact on individual Canadians who could lose their jobs, their homes and their quality of life.”

Rising interest rates make debt more expensive at a time when workers across the country are struggling from paycheque to paycheque. An unnecessary recession would hit precarious and low-wage workers, in particular women, Indigenous, racialized, and recent immigrant workers the hardest. 

“Our economy is powered by workers. Without them contributing to the economy, this country will be in dire straits,” said Bruske. “We need an open and transparent discussion of our country’s monetary policy, the best ways to fight inflation avoiding a recession – without causing widespread harm to workers and families

A report released last week by the Canadian Labour Congress and Centre for Future Work proposed policy alternatives to rate hikes. The report explains the shortcomings of the Bank of Canada’s interest rate hikes and explores the economic costs of a recession. 

The report also demonstrates the increasing inequality between workers and corporations. Business profits have reached their highest-ever share of GDP while workers’ share of GDP has decreased since 2019. 

“Governments cannot continue to stand by while workers are asked to pay the price of an inflation crisis they did not create, while their share of national income has fallen drastically,” said Bruske.

Canada’s unions are calling on the Bank of Canada to pause interest rate hikes until the impact of previous policy interventions is clear. In addition, all levels of government must take measures to address and ameliorate the true causes of current inflation, protect Canadians against its effects, and safeguard jobs and incomes.

A copy of the report can be downloaded here

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