Scotia’s Holt blasts feds as ‘serial stimulators’ of inflation

Scotiabank Economics Vice-President and Head of Capital Markets Economics Derek Holt is blasting the federal government for stimulus measures his team argues contribute to inflation.

Holt said any argument that federal spending has not inflamed price pressures does not jibe with economic fundamentals in the wake of the feds announcing another $4.5 billion worth of spending.

“It’s not a coincidence that it is timed to be arriving just in time for holiday shopping season. If you didn’t want people to spend it and you didn’t want people to spend it, give it to people in February — when most of us are already dealing with two feet of snow on the ground after we’ve already blown our wallets on the holiday season,” he said in an interview Friday.

“There’s this narrative that says inflation has nothing to do with stimulus at home — central banks, governments, didn’t cause any of it — it’s just all global supply chains and greedy corporations. That suits their cause, but it’s factually false.”

Canadian inflation has moderated from almost a four-decade high of 8.1 per cent, falling to 7.6 per cent in July, but still remains more than three times higher than the Bank of Canada’s two per cent target.

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