Situation Report Canada

by Maj (ret'd) CORNELIU E. CHISU, CD, PMSC, FEC, CET, P. Eng. Former Member of Parliament Pickering-Scarborough East As the world continues to fester in turmoil with the ongoing war in Ukraine and dealing with the spectre of economic uncertainties, let's look at the situation in our own nation. First of all, the liberal government is fully concentrated on the situation in Ukraine with the Prime Minister making trips to Europe, meeting with allies to see what they can do for humanity there. A lot of talk, photo ops and the usual declaration of help and committing financial resources for the Ukrainian people in need. Back home, however, the economic situation is becoming worrisome, with the Covid 19 pandemic disappearing off the radar and province after province quickly lifting associated restrictions while the federal government follows at a slower pace. Forgotten are the usual medical "professionals'" briefing, with everybody wanting to put the pandemic behind, and looking forward to living their lives. Two years of doom seems to have been enough, with the pandemic magically gone, at least for the politicians. Now there are other issues on the horizon and the economic outlook is not good. Statistics Canada says the annual inflation rate climbed to 5.7 per cent in February, its highest level since August 1991 and the second straight month over 5 per cent. Helping to drive the increase in February were higher gasoline prices that were up 32.3 per cent compared with February 2021 and 6.9 per cent from a month earlier. Statistics Canada says that excluding gasoline prices, the headline inflation rate would have been 4.7 per cent in February. So the question is, will the governments ease their taxes on gasoline or will they continue to be greedy and insist on going more green? Grocery store prices were up 7.4 per cent for the largest yearly increase since May 2009, pushed higher by rising fuel costs that are being passed on to consumers. Statistics Canada says shelter costs, which includes prices for homes and rental units, rose at their fastest pace since August 1983. The rise in the consumer price index compared with a year-over-year gain of 5.1 per cent in January, and marked 11 consecutive months that the index has been above the Bank of Canada's inflation target zone of between one and three per cent. The average of the three measures for core inflation, which are considered better gauges of underlying price pressures and closely tracked by the Bank of Canada, was 3.5 per cent for February, up from the 3.2 per cent reported in January. February's average was the highest rate recorded since June 1991. The figures point to more pervasive and broad-based pressure on prices that has left the central bank uneasy about inflation. Two weeks ago, the bank raised its key policy rate to 0.5 per cent, marking the first hike in two years, and warned of more hikes to come to rein in inflation. Economists are warning that the inflation rate could yet go higher on the back of surging prices at the gas pumps and grocery stores as Russia's invasion of Ukraine pushed up global oil and wheat prices. With that said, I am curious to know how the liberal government will deal with this situation. Continuing with their policy of printing money and spending what they do not have will definitively not be a solution for the country and its citizens. While the government busies itself with the events unfolding internationally, responding at lightening speed, in the face of our own worrisome economic outlook at home, what is the loyal opposition doing? The Conservative Party of Canada is again busy looking for a leader who can defeat the Liberals. After Erin O'Toole was deposed, a leadership contest was called, with a new leader to be crowned on the 10th of September, just in time for the beginning of the Parliamentary fall session. The candidates are lining up with Pierre Poilievre, a feisty and outspoken conservative in the lead, and several others in pursuit. Jean Charest, a former Progressive Conservative federally and a Quebec Liberal Premier provincially, is strongly favored by party elite, and Patrick Brown, a former Ontario PC leader and Mayor of Brampton has also thrown his hat into the ring. It will be interesting to see the outcome of this leadership contest, as pandemic restrictions are lifting rapidly and the new old normal is back. The unfolding of the conservative leadership campaign should be revealing, with the country so desperately in need of new ideas and strategies for dealing with economically challenging times. In conclusion it is hard not to know what comes next. Many experts and seasoned minds make their best predictions, but nobody knows anything for certain. Significant uncertainty still exists about the future of Covid or other possible pandemics, the true health of the global economy and the growing dysfunction of politics across the board. The future seems more precarious than we even imagined in the midst of the pandemic, but there is still hope.