Bank of Canada governor Macklem has ‘declared class war on working people’: Unifor president

The head of the largest private-sector union in Canada said Monday that Bank of Canada Governor Tiff Macklem is waging a “class war” on working people and it’s time to stop hiking interest rates.

“Rather than developing a tailored response intended to slow profits, stop profiteering, fix supply chain bottlenecks and help workers keep up, policy makers have taken to blaming workers instead — including the governor of the Bank of Canada, who has basically declared class war on working people in this country,” said Unifor president Lana Payne. 

Unifor represents more than 300,000 employees.

Payne said shareholders and corporate executives are reaping “obscene benefits in the form of higher dividends, share repurchases and bonuses” while workers struggle with high inflation.

Payne stated that “the medicine the Bank has with regard to inflation is causing a lot pain out there.”

“The truth is that the Bank of Canada has increased interest rates faster than any other country in the world. We need to ask, “Is the Bank of Canada actually doing what it says it should?”

Canada’s benchmark interest rates currently stand at 3.75 percent. In the United States it’s 4 per cent, while it’s 3 per cent in the U.K. and 2 per cent in the European Union.

Payne the Bank of Canada is persisting with its plan to raise interest rates even as inflation drops.

Payne stated that this “seems like a lot needless pain for working people right now” in Canada, and added that interest rates are “high enough now.” This must be stopped. 

In a recent interview with CBC News, Macklem said that while rate hikes are making life harder for many Canadians, they’re necessary.

“We don’t want this to be more difficult than it must be.” he told the CBC’s Peter Armstrong.“But at a same time, Canadians will need to continue to suffer the high inflation that is hurting them every single day, if it’s not enough, or if we’re weak.

Inflation and low unemployment

Analysts say that if the bank pauses too soon while inflation is still rising, it will have to take even more aggressive measures down the road. On the other hand, if it overshoots and keeps hiking rates after inflation starts coming down in a sustainable way, many Canadians will suffer needlessly.

While Payne said she thinks the Bank should hold off further rate hikes, Macklem disagrees.

“We believe there is an urgent need for additional increases, but we are closer to the end this tightening cycle. I can’t tell you exactly what that is,” he told Armstrong. “But we’re not there yet. We are moving closer.

Payne also criticized Macklem for comments he made last week to the Public Policy Forum in Toronto, when he said that the current low unemployment rate is not sustainable.

“Blaming workers because they have a job and demanding decent wages and benefits is just plain wrong. We need an economy that works in all areas, not just for a few,” she stated. 

Macklem stated last week that although there is a record low unemployment rate, employers are finding it harder to fill jobs.

“The tightness of the labour market is a sign of the general imbalance between supply and demand that is fuelling inflation, and hurting all Canadians,” said he. He also stated that “relieving the pressure on the labour market will contribute towards restoring price stability.”