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Aug 17, 2021
Trudeau confronts inflation as economic achilles heel at polls
We can expect the liberals to introduce higher taxes on top 1%: CIBC’s Jamie Golombek
Prime Minister Justin Trudeau can expect mostly good news from economic data during Canada’s five-week election campaign. But there’s one potential trouble spot for him: consumer prices.
A Statistics Canada report due Wednesday is expected to show that price inflation accelerated in July by almost the fastest rate in two decades. Economists estimate that consumer prices jumped 3.4 per cent last month on an annual basis, from 3.1 per cent in June.
Such numbers are sure to provoke attacks from rival parties over higher living costs -- potentially Trudeau’s biggest economic vulnerability, with polls showing it’s a top election issue for Canadians. Inflation in the country has risen above 3.4 per cent only twice since 2003.
Other economic releases between now and the Sept. 20 vote are expected to be mostly favorable, with the data expected to show rising employment in August and economic activity returning to near pre-pandemic levels.
Indeed, high vaccination rates have allowed federal and provincial governments to ease restrictions and businesses to reopen at greater capacity in the past few months.
“On the real economy side, the news will be positive. The one risk is we’re going to get inflation reports that will show it perking up a bit in July and August,” Doug Porter, chief economist at Bank of Montreal, said by phone.
Conservative Leader Erin O’Toole, whose party is running second to Trudeau’s Liberals, released a lengthy campaign platform on Monday that includes a one-month sales-tax holiday and proposals to boost housing supply and mobile phone competition. The Liberals are targeting younger voters with promises of subsidized child care at $10 (US$8) a day.
Here are the other key releases scheduled:
- Aug. 20: Retail sales for June. Economists predict a 4.5 per cent jump
- Aug. 31: Second-quarter GDP estimated at 2.5 per cent
- Sept. 10: Employment for August
- Sept 15: Inflation for August
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