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Monetary policy involves setting inflation targets. Higher inflation lowers families’ purchasing power. Lower purchasing power means less money for groceries, rent, mortgages, gas, clothes and everything else families need. Inflation hit 3.7 per cent in July, one of its highest readings in 20 years; this is also the fourth straight month the rate exceeded the Bank’s 1 per cent to 3 per cent mandate. That mandate is set by the federal government, and is up for renewal later this year.
In other words, thinking about monetary policy is thinking about families, and the prime minister is in a position to do something about it. If he understands how it works, that is.
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Cue the outrage by the Conservatives, who were already on the anti-inflation train. “The simple fact is that Justin Trudeau has made life less affordable for Canadians,” Conservative Leader Erin O’Toole said in a statement. “Regular Canadians are struggling to make ends meet.” The Tories also released an online ad headlined “It’s the Prime Minister’s job to think about monetary policy — Monetary policy has a direct impact on the cost of living.”