Inflation Rate Hits Highest in 18 Years, Could It Hinder Prime Minister Trudeau Ahead of General Election?

Justin Trudeau, Prime Minister of Canada [Photo by Reuters Yonhap News]

[Asia Economy Reporter Park Byung-hee] Canada's consumer price inflation rate has soared to the highest level in 18 years. This is expected to become a major obstacle for Prime Minister Justin Trudeau ahead of the general election scheduled for the 20th (local time).

Prime Minister Trudeau is planning large-scale fiscal spending to recover the economy after COVID-19. To facilitate this, he has taken the gamble of holding an early election two years ahead of schedule. However, as prices surge, voters' concerns that the government's large-scale fiscal spending could trigger inflation are expected to grow.

According to major foreign media on the 15th (local time), Statistics Canada announced that the consumer price index for August rose 4.1% compared to the same month last year. This is the highest since March 2003.

Immediately, the opposition Conservative Party launched a fierce attack, saying the sharp rise in prices shows Prime Minister Trudeau's economic policy failure.

Erin O'Toole, leader of the Conservative Party, during a campaign in Saguenay, Quebec, said Canadians are facing an economic crisis where they cannot purchase goods at reasonable prices, directly blaming Trudeau's reckless fiscal spending and excessive government debt. O'Toole added that Trudeau seems unconcerned about the soaring cost of living. He said the Conservative government would reduce government spending to control prices and achieve fiscal balance within 10 years.

Trudeau came to power in 2015. In that election, the Liberal Party won a majority with 184 seats, but failed to secure a majority in the 2019 election.

Erin O'Toole, Leader of the Conservative Party of Canada
Photo by Reuters Yonhap News

Since the COVID-19 pandemic, government fiscal spending has increased, and currently, Canada's government debt and fiscal deficit are at their highest levels since World War II. However, Trudeau maintains that additional investment is necessary for economic recovery after COVID-19. To block opposition resistance that could hinder policy implementation, he has gambled on an early election to regain the majority lost in the 2019 election.

During a campaign in Halifax, Nova Scotia, Trudeau said, "I know Canadian families are worried about the cost of living," and emphasized, "That is why the government has executed large-scale fiscal spending to protect businesses and Canadians from the worst COVID-19 pandemic situation." Trudeau added, "Canada is recovering from the worst COVID-19 crisis, and prices are rising."

Trudeau's gamble appears likely to end in failure. According to a poll released by CTV on the same day, the Liberal Party's support rate under Trudeau is 30.5%, trailing the Conservative Party's 31.2%.

He is now in a situation where he must worry not about securing a majority but about whether he can maintain power. Of course, Trudeau has experience in the 2019 election where, despite trailing in the popular vote, he succeeded in renewing his government. At that time, the Liberal Party's support rate was 33.1%, lower than the Conservative Party's 34.3%, but the Liberals led in seats with 157 compared to the Conservatives' 121.

From Trudeau's perspective, the strong performance of the New Democratic Party (NDP) is also a concern. In the CTV poll, the NDP's party support rate was 21.4%. The NDP is a center-left party similar to the Liberals and appears to be eroding Liberal support. In the 2019 election, the NDP's vote share was 16.0%.

This content was produced with the assistance of AI translation services.