As inflation soars and interest rates rise, the issue of affordability is something all levels of governments are being pressured to address. A new survey shows that debt, combined with rising interest rates, is a growing concern for Canadians. According to the MNP Consumer Debt Index, neary half of Canadians are concerned they will not be able to cover living expenses in the coming year without going into debt. Nearly half – 49 per cent – say they are $200 or less away from not being able to meet their financial obligations.
On this episode of Editor's Edition, Yahoo Finance Canada's Alicja Siekierska and the Public Policy Forum's Sean Speer discuss the issue of affordability, and how it may shape the upcoming provincial election in Ontario.
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SEAN SPEER: Yeah, we're about to go through a kind of pretty tumultuous economic context. And it's going to be interesting to see the policy and political fallout of this sustained period of high inflation and rising interest rates. If I were, think about this, the Trudeau government, come 2025, which is there will be the end of its current parliamentary agreement with the NDP, will have been in power for about a decade. The average lifespan of a Canadian government is 10 years. So it'll already be long in the tooth. If you add to that the period of the inflation that we've seen and rising interest rates, I think we'll be operating in a political context in which the demand for change will likely be pretty high.
ALICJA SIEKIERSKA: How do you see this in the more near term playing out or having an impact on things like the Ontario Provincial election? Do you think that these pocketbook issues will be the top priority on the campaign trail?
SEAN SPEER: Yeah, I mean, the [? Ford ?] government has been mocked, mostly, understandably, for the cash payments that it sent out in recent days, of returning fees that were charged for license plate renewals. My in-laws received $300 each or something like that. But for some of those households in need, that would be a much welcome $300. And I only mention that particular case because, again, it sort of reflects that the government is interpreting and seeing some of these same trends that you outlined in your poll and that Darrell Bricker has been finding in his own, that people are feeling stretched. And I think you'll see the liberals and the NDP in Ontario with their own competing policies that speak to those sentiments and concern.