Key rate hike: Enough is enough!

Bank of Canada’s Mr. Governor,

It is unusual for a Member of Parliament to write to you to inform you of his reservations about a new increase in the key interest rate.

However, I believe that the rapid increase in recent months will seriously affect the already fragile financial health of millions of families, and I would like to share with you my experience in this field to better understand the impact of your decisions.

The messages I receive from people living in my riding are testimony to this. Every day, I interact with citizens who are affected not only by the rising cost of living, but also by the rampant rise in interest rates on their loans.

This often takes the form of housing costs that they own or rent, which, as you know, can have a ripple effect contributing to inflationary pressures.

I have also visited many SMEs, many of which have been weakened by the Covid years and are now worried about the rapidly increasing cost of their loans. It also creates the risk of another inflationary effect, as some pass on these cost increases to their consumers.

In conclusion, monetary policy transmission lags mean that recent rate hikes have not yet had their full impact on the economy, so raising rates again is like taking another dose of medicine immediately before the previous one takes effect. It is likely to cause more suffering to our fellow citizens who suffer than the evil we are trying to combat.

So I urge you to take a break from the key rate hike.

Haroon Bouzzi, MNA for Maurice-Richard, National Assembly of Quebec