With omicron case counts surging and most of the country going through yet another round of devastating restrictions, the labour market will experience disruptive shifts that are not reflected in today’s release.
(OTTAWA) – December 1, 2021 – The Canadian Chamber of Commerce’s President and CEO, Perrin Beatty, issued the following statement following on inflationary pressures impacting Canadians.
“Inflation continues on an increasingly concerning trend, which challenges assumptions about the timing and nature of our economic recovery from COVID-19’s devastating impacts on the finances of Canadians, the businesses employing them and the government’s books. With inflation at 4.7%, we are now at an 18-year high.
New data from the Canadian Survey on Business Conditions shows rising costs remain the biggest obstacle for businesses right now and into the new year, with 43% of businesses saying they are the biggest hurdle to recovery. At the same time, the vast majority of private-sector businesses (89%) don’t expect their profitability to improve over the next three months, while more than one-third expect it to decline. This is a significant part of the economy standing still or sliding backwards.
With a serious debate about inflation absent from last week’s return to Parliament, the rapidly changing context of Canada’s fiscal picture should be a priority for our elected officials. Considering that the eventual return to a “neutral” overnight policy interest rate – which is only an increase of 200 basis points from the current level – is expected to reduce the federal government’s bottom line by about $2 billion in the first year, $5 billion in second year, and over $9 billion five years from now, fiscal pressures risk increasing.
While we are clearly not yet out of the woods from COVID’s economic impacts and governments at all levels must do more to contain the pandemic, Parliamentarians must consider inflationary pressures as they debate new, unfunded programs. Such strong inflationary signals demand we rein in spending that risks leading to tax increases as Canadians and businesses adjust to their reduced purchasing power.”
About the Canadian Chamber of Commerce – Because Business Matters
The Canadian Chamber of Commerce helps build the businesses that support our families, our communities and our country. We do this by influencing government policy, by providing essential business services and by connecting businesses to information they can use, to opportunities for growth and to a network of local chambers, businesses, decision-makers and peers from across the country, in every sector of the economy and at all levels of government, as well as internationally. We are unapologetic in our support for business and the vital role it plays in building and sustaining our great nation.
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