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Trudeau’s Inaction Amid Rising Costs of Living

Failure to address inflation has dire consequences

On September 20, 2021, Justin Trudeau of the Liberal Party won his third consecutive election, forming another minority government. In the subsequent Speech from the Throne, Governor General Mary Simon read out the Liberals’ agenda for the upcoming parliamentary session, announcing the Trudeau government’s promise to “keep tackling the rising cost of living.” One year later, the Liberal government has come nowhere close to honouring its pledge.

According to a survey conducted on August 22, 2022 by the Angus Reid Institute, 56 per cent of Canadians say that they cannot “keep pace” with the rising cost of living. An August EY survey found that 80 per cent of Canadians are “concerned about their finances amid rising cost-of-living,” with 69 per cent of respondents stating that they expect their living costs to “increase even further over the next six months.” This comes while the country is experiencing its worst bout of inflation since 1983, peaking at 7.7 per cent in July. 

While global factors such as supply chain backlogs and Russia’s invasion of Ukraine are partly responsible for inflation in Canada, a risk of inflation existed long before the pandemic. Economist Vivek Dehejia explains, “I think there was a certain amount of … complacency, because inflation has been so low for decades.” He further explains that inflationary pressures were obvious long before the war in Ukraine, fed by a combination of record-low interest rates, pandemic stimulus spending, and pent-up consumer demand. Trudeau has allowed his economy to overheat, causing prices to increase. Unable to raise taxes for fear of stagflation and unwilling to break campaign promises that have led to his success, Trudeau is stuck in a bind of his own creation. Yet rather than take action and take the political hit, Trudeau has dealt with the issue in a laissez-faire style, letting inflation spiral for the better part of seven months before unveiling his government’s plan to tackle inflation on September 13. While the federal government drags its heels, provincial governments have implemented various approaches to tackle inflation. For example, Ontario has temporarily suspended provincial fuel taxes, and Saskatchewan will begin sending out an “affordability cheque” to every resident this fall. 

The Liberal government has failed to combat this cost of living crisis. Despite holding the third largest oil reserves in the world, Canadians pay the highest gasoline prices (as a percentage of income) in the G7. Yet Trudeau remains the only leader in the G7 that has not offered some sort of relief on gas prices. Indeed, Canada has been reluctant to join the rest of the G7 in offering a temporary “holiday” on gas GST taxes, something that would help money-tight Canadians by lowering gas prices by five per cent, or eight cents per litre. 

Furthermore, the Trudeau government has done nothing to combat the rising costs of natural gas, the single largest source of energy used in Canadian homes. These rising costs have affected those earning minimum wage and senior citizens in particular. Rising grocery and housing costs have caused seniors across the country to question if they need to postpone plans to retire. CBC reported that senior citizens have seen increases of up to $55 in their home heating bills this month. Lynda McCarthy, a 73-year-old living in Ontario, detailed how seniors are paying an additional $600 a year on heating alone – something that could force many to put off retirement plans. Similarly, the recent rise in inflation has rendered minimum wage workers unable to cover their rising costs of living. The economic situation has worsened so much so that Quebec’s recent minimum wage increase doesn’t even cover inflation. The Institut de Recherche et d’Informations Socioéconomiques calculated the living wage in Montreal to be $18 per hour  – whereas the Quebec minimum wage is only $14.25. Canadians earning minimum wage – especially in provinces where it has not recently increased – aren’t earning enough to meet their needs in the current economic climate.  

Over the summer, a coalition of 15 Quebec unions and organizations gathered to advocate for further increases to Quebec’s minimum wage. With continuing inflation, supporting community groups that advocate for further minimum wage increases, like the Centrale des syndicats du Québec (CSQ) union and The Common Front, can be a first step toward easing the pain of inflation and increasing equity for all. You can also get involved with organizations like the Canadian Association of Retired Persons (CARP), an advocacy organization that looks to voice the concerns of retired senior citizens by appealing directly to the federal government. Finally, you can support proposals like the GST “holiday” on gas, which aims to alleviate the concerns of Canadians by reducing the amount we pay at the pumps. Social housing  and housing cooperatives – such as the Milton Parc Housing Co-Op and the proposed project by the Saint-Urbain Community – provide alternative solutions to affordable housing amid  rising costs of living.