MARK RENDELL
PUBLISHED DECEMBER 1, 2021

Pierre Poilievre has been spoiling for a fight about inflation for the past year and a half. With the return of Parliament coinciding with the biggest surge in consumer prices in nearly two decades, the recently reappointed Conservative finance critic is getting the fracas he wanted.

“Everyone knows that this Prime Minister does not think about monetary policy… But when will he start thinking about the real cost burden he is putting on the shoulders of Canadians?” Mr. Poilievre asked in the first Question Period of the new Parliament last Wednesday.

Prime Minister Justin Trudeau shot back: “I am impressed to see the high esteem in which the member for Carleton seems to hold me, that I was able to create a global inflation crisis.”

The testy exchange has been repeated over the past week, with Mr. Poilievre and other Conservative MPs trying to pin rising prices on excessive government spending, while Liberal frontbenchers respond that galloping inflation is a global phenomenon.

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With the annual rate of growth in the consumer price index hitting an 18-year high of 4.7 per cent in October, inflation has shot to the top of the Canadian political agenda in a way not seen since the 1980s.

The resulting debate has been noisy and muddled. Politicians, who typically leave discussions of inflation to the Bank of Canada, are suddenly opining on the causes and appropriate responses, sometimes leaning on fringe economic ideas. General concerns about affordability, notably in the housing market, are blurring with arguments about statistical measures followed by economists.

“When politicians talk about affordability and inflation, they’re usually targeting the average Canadian that doesn’t know the ins and outs of [the consumer price index], but they know what they pay at the grocery store and they know what houses are going for in their neighbourhood,” said Rebekah Young, director of fiscal and provincial economics with the Bank of Nova Scotia.

Conservatives have sensed a winning narrative, and have launched a barrage in the House of Commons and on social media aimed at tying the run-up in prices to government deficits and massive pandemic support programs. The strategy mirrors that of the Republican Party in the United States. Republican Senator Rick Scott told the Wall Street Journal earlier in November that inflation is a “gold mine for us.”

Having just won an election, the Liberals’ political fortunes are less susceptible to stubbornly high inflation than those of the U.S. Democratic Party, which faces a sustained attack ahead of midterm elections next year. Nonetheless, the politics of inflation could curtail the minority Liberal government’s room to manoeuvre on expenditures. And with the Bank of Canada forecasting inflation to average 3.4 per cent next year – even before the floods in British Columbia knocked out supply corridors and caused backlogs at the Port of Vancouver – the issue gives opposition parties a long runway.

“When you’re in opposition, you actually want bad things to happen to the government, and inflation is bad. You’d be crazy not to take advantage of it,” said Ken Boessenkool, a lecturer at McGill University’s Max Bell School of Public Policy, and a former Conservative economic adviser.