Commentary
Canadians have been told repeatedly that inflation is under control. Headline consumer price index (CPI) has retreated from its 2022 peak. The Bank of Canada has cut rates. The crisis, we are assured, is behind us.
It isn’t. Canada has a structural inflation problem—one that monetary policy alone cannot fix because it wasn’t created by monetary policy alone. It was built, over decades, through a compounding series of policy failures that have left the country uniquely exposed to price pressures that other advanced economies do not face in the same combination or intensity.
Understanding why requires looking at four interlocking forces: a chronically weak currency, deep import dependency, a housing market that has become a one-way inflation engine, and a productivity collapse so severe that the Bank of Canada’s own economists now describe it as a national emergency….