As the Bank of Canada prepares for its upcoming June 5 announcement, Unifor, Canada’s largest private sector union, is intensifying its call for the bank to lower interest rates, citing the impact on working people across the country.
“The Bank of Canada hiked and then stubbornly held the interest rate level for far too long and it is past time for relief to be provided to working people across the country,” said Unifor National President Lana Payne. “The reality is high interest rates are creating the inflation problems the Bank is trying to address.”
Payne has been publicly urging Bank of Canada Governor Tiff Macklem to reduce interest rates for the past year and a half. In November 2022, she accused Macklem of waging a class war against workers and relying on outdated economic theory by encouraging employers to keep wages low, despite rising prices and continued interest rate hikes that disproportionately affect working people.
Last June, Unifor representatives met face-to-face with Macklem to discuss concerns over increasing mortgage and rent costs, as well as profiteering in sectors such as groceries and energy.
In October, Payne partnered with Rob Wildeboer, Executive of Martinrea International, to publish an op-ed in the Toronto Star criticizing the Bank of Canada’s policies for exacerbating economic conditions.
“Mortgage interest costs are one of the most significant contributors to inflation right now — meaning the Bank of Canada’s actions are actually stoking the inflation they are trying to extinguish. Diverting household spending from groceries to interest payments does not reduce demand for food but it does increase hunger and stress,” wrote Payne and Wildeboer.
Most recently, in a letter ahead of the April 10 announcement, Payne emphasized, “There is no need to wait. Canadians need relief now.”
In the letter, Payne pointed out that while the inflation cycle may have begun due to supply chain issues and price gouging, the largest contributor to inflation last fall was shelter costs, driven by increased interest rates.
In 2022 alone, Canadians endured seven interest rate hikes, with subsequent increases in January, June, and July, when the Bank of Canada raised the key rate to 5%. Since then, the bank has maintained the rate at 5% in its last four announcements.
“We can’t rely on old and outdated economic theory in the face of new structural realities. If we’re aiming for a thriving economy and shared prosperity, the theories of the past just won’t cut it,” said Payne. “We expect to see rapid action beginning on June 5.”
Unifor represents over 315,000 members across Canada, working in every major sector of the economy. The union is committed to a modern approach to unionism, adopting new tools, engaging its members, and evolving to meet the demands of the 21st century.