As the Bank of Canada (BoC) continues to raise interest rates, the majority of Canadians are losing confidence in the central bank’s ability to deal with the inflation crisis.
Following the BoC’s decision to raise interest rates by 100 basis points, the largest increase in 22 years, the Angus Reid Institute surveyed Canadians to see if they had confidence in the BoC to navigate the inflation crisis.
The poll revealed that 53% of Canadians were not confident in the Bank making the right decisions to combat inflation.
The poll also revealed a decline in consumer confidence. The majority (75%) of respondents believe the next 12 months is a bad time to make major purchases such as a home, car, renovation or big vacation – this was particularly high in Alberta (81%).
“That says to me that Canadians are already in very much belt-tightening mode,” Angus Reid Institute president Shachi Kurl told the Calgary Herald.
“It starts with the big stuff, but then it continues on into discretionary spending, people really looking at their credit card bills.”
The latest Angus Reid poll also revealed that Conservative Party of Canada voters were most skeptical of the central bank, with 67% of respondents having little confidence in the BoC. In comparison, 39% of Liberal voters and 47% of NDP voters had no confidence in the Bank.
In recent months, the governor of BoC Tiff Macklem has received criticism for the Bank’s failed predictions. In 2020, the BoC told Canadians that inflation would “remain less than two percent.”
Conservative leadership candidate Pierre Poilievre has blamed Macklem for playing into Prime Minister Justin Trudeau’s spending habits.
While campaigning to become leader, Poilievre pledged to fire Macklem and appoint a new governor to the Bank.
“I would replace him with a new governor who would reinstate our low-inflation mandate, protect the purchasing power of our dollar, and honour the working people who earned those dollars,” said Poilievre.
Soon after Poilievre’s remarks, deputy governor Paul Beaudry admitted that the BoC should be “held accountable” for being unable to keep inflation within targets.
“The aspect that we should be held accountable is exactly right,” said Beaudry.
“Right now we completely understand that lots of Canadians can be frustrated at the situation. It’s difficult for a lot of people. And we haven’t managed to keep inflation at our target, so it’s appropriate (that) people are asking us questions.”