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Unifor continues to pressure the Bank of Canada to lower interest rates as the bank prepares for its upcoming June 5 announcement.
“The Bank of Canada hiked and then stubbornly held the interest rate level for far too long and it is past time for relief to be provided to working people across the country,” said Unifor National President Lana Payne. “The reality is high interest rates are creating the inflation problems the Bank is trying to address.”
For the past year and a half, Payne has publicly called on Bank of Canada Governor Tiff Macklem to reduce interest rates. In November 2022, she accused Macklem of waging a class war against workers and relying on outdated economic theory by encouraging employers to keep wages low, vilifying workers’ demands for wage increases to keep up with rising prices while continuing to hike interest rates that the bank knew would hit working people hard.
The bank completely avoided any conversation or calling out of price gouging behaviour that has been proved responsible for inflation in the first place.
The accusation sparked a national monetary policy conversation with a growing number of voices advocating for the reduction.
Last June, Unifor raised the concerns of workers in a face-to-face meeting with Macklem with discussion on climbing mortgage and rent costs and concerns about profiteering in targeted economic sectors, including grocery and energy.
In October, Payne partnered with Rob Wildeboer, Executive of Martinrea International to publish a Toronto Star oped that charged the Bank of Canada’s actions were worsening conditions.
“Mortgage interest costs are one of the most significant contributors to inflation right now — meaning the Bank of Canada’s actions are actually stoking the inflation they are trying to extinguish. Diverting household spending from groceries to interest payments does not reduce demand for food but it does increase hunger and stress,” wrote Payne and Wildeboer.
Most recently in a letter before the April 10 announcement Payne wrote “There is no need to wait. Canadians need relief now.”
In the letter Payne pointed out that while the inflation cycle may have begun due to supply chain issues and price gouging by last fall the largest contributor to inflation was shelter – driven by increased interest rates.
Canadians endured seven interest rate hikes in 2022 with subsequent increases in January, June and finally in July last year when the BoC raised the key rate to 5%. The bank has held the rate at 5% in the last four rounds of announcements.
“We can’t rely on old and outdated economic theory in the face of new structural realities. If we’re aiming for a thriving economy and shared prosperity, the theories of the past just won’t cut it,” said Payne. “We expect to see rapid action now beginning on June 5.”
