Finance Minister Calls Bank of Canada Rate Hold ‘Welcome Relief’

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Prime Minister Justin Trudeau’s government praised the Bank of Canada for holding interest rates steady, in a rare public reaction to a monetary policy decision.

Finance Minister Chrystia Freeland, who is also deputy prime minister, issued a statement minutes after Governor Tiff Macklem and his officials left borrowing costs unchanged at 5% on Wednesday.

“The Bank of Canada’s decision to maintain its overnight interest rate is welcome relief for Canadians,” Freeland said. “As the Bank continues this work, my number one priority is to use all the tools at my disposal, and to work with partners at other levels of government across Canada, to ensure that interest rates can come down as soon as possible.”

While she noted that she fully respects the central bank’s independence, her comments reflect the mounting political pressure policymakers face as they try to slow the economy without causing unnecessary financial harm. Before Wednesday’s decision, the premiers of Ontario, British Columbia and Newfoundland all urged Macklem to cease raising rates.

Trudeau and Freeland have also faced criticism from economists who argue their government’s deficit-funded spending has led rates higher than they would have otherwise needed to be. Their main rival in the next election, Conservative Leader Pierre Poilievre, hammers the Liberals for drastic increases in the cost of living every chance he gets. He has also threatened to fire Macklem as governor of the central bank were he to be elected prime minister.

 

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