Union boss says Bank of Canada governor is waging a class war on workers

Article content

The leader of Canada’s largest private-sector union accused the central bank and its governor, Tiff Macklem, of class warfare, ratcheting up its criticism of aggressive interest-rate increases to tame inflation.

Article content

“Rather than developing a tailored response intended to slow profits, stop profiteering, fix supply-chain bottlenecks and help workers keep up, policymakers have taken to blaming workers instead — including the governor of the Bank of Canada, who has basically declared a class war on working people in this country,” Unifor president Lana Payne told reporters Monday in Ottawa.

Article content

She accused Macklem of advising employers to keep wages low and of trying to engineer a higher unemployment rate to help bring soaring consumer prices to heel. She said higher interest rates are hurting workers and don’t address “the root cause of the problem.”

Payne’s comments are the latest criticism the central bank has faced in recent weeks. Unions and labour-friendly politicians like New Democratic Party Leader Jagmeet Singh have blasted the Bank of Canada over its aggressive hiking cycle, which has seen the benchmark overnight lending rate climb to 3.75 per cent from the emergency pandemic low of 0.25 per cent that held until March.

Article content

While the central bank has dialled back its pace of hikes and signalled that the end of the tightening cycle is near, Macklem has said rates need to rise further because inflation is still too high. Should higher inflation expectations become entrenched, the bank fears a self-fulfilling cycle of increasing prices and wage demands.

“Unifor will not tolerate this false narrative of a wage-price spiral to justify aggressive interest rate hikes plunging our economy into what is likely to be an inevitable recession,” Payne said. “We need an economy that works for everyone, not an economy that delivers only for the few.”

In a speech last week, Macklem acknowledged Canada’s labour market faces a “difficult adjustment” and needs to be rebalanced as the economy adjusts to higher borrowing costs. Before Payne’s press briefing on Monday, the governor told a central bank conference on diversity and inclusion that high inflation hits low-income families the hardest.

The Bank of Canada’s next policy decision is due Dec. 7, with traders in overnight swaps markets putting the odds of another 50-basis-point hike at about a coin flip.

Bloomberg.com