Finance

During question period on finance, the Conservatives argued that the Bank of Canada’s interest rate increase shows government borrowing and spending are driving inflation, noting that debt interest now costs more than health care or defence, and asking the government to commit to lowering the deficit and cutting spending in the upcoming budget. The Liberals responded that their programs—such as a grocery benefit paid to 12 million Canadians, tax cuts, defence investment, and new trade deals—are supports for people facing cost pressures, and questioned how the opposition’s proposed cuts would be paid for.Written by AI from the debate. Updated .

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2 statements

Philip Lawrence, Northumberland—Clarke

Conservative
“Government debt causes inflation. Canada now spends more on debt interest than on health care or the military, and rising interest rates will hurt millions of Canadians. I want the government to lower the deficit as a share of the economy, like it promised.”
Official Hansard

Mr. Speaker, the Bank of Canada raised its interest rates for the first time since 2023. The government is claiming that inflation and interest rates are like the weather and are completely beyond its control, but we know that is not the truth. We know that sovereign debt accelerates inflation. Canada now spends more on interest than it does on health care or on the military. The interest rate hike means that millions of Canadians will be forced to the financial brink. Will the government commit to achieving its own fiscal anchor of a declining deficit-to-GDP ratio?

Philip Lawrence, Northumberland—Clarke

Conservative
“The Bank of Canada is raising interest rates to fight inflation, but the government keeps spending more money and making inflation worse. I want the minister to promise to spend less in the upcoming budget.”
Official Hansard

Mr. Speaker, the Governor of the Bank of Canada was quite clear: He has raised interest rates because of increasing inflationary pressure. All experts agree that expansive fiscal policy accelerates inflation. In effect, the Governor of the Bank of Canada is hitting the brakes hard while the Minister of Finance continues to accelerate faster and faster. Will the minister commit to some fiscal restraint in the upcoming budget so that Canadians are not pushed over the inflationary cliff?

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