Freeland Stresses Bank of Canada’s Independence After Singh Criticizes Rate Hikes

Deputy Prime Minister and Finance Minister Chrystia Freeland makes her way to a cabinet meeting on Parliament Hill, Oct. 25, 2022 in Ottawa. (The Canadian Press/Adrian Wyld)

As another interest rate hike looms, Finance Minister Chrystia Freeland is emphasizing the Bank of Canada’s independence after criticism from federal NDP Leader Jagmeet Singh.

Singh sent a letter to Prime Minister Justin Trudeau Friday warning that another rate hike will have a “serious impact on families” as fears of a recession grow.

The central bank is expected to raise its key interest rate by half or three quarters of a percentage point on Wednesday in an effort to clamp down on decades-high inflation, making it the sixth consecutive rate hike this year.

When asked by reporters Tuesday what she thought of Singh’s letter, Freeland acknowledged the economic pain Canadians are feeling but noted that institutional stability is important during challenging economic times, with the Bank of Canada’s independence playing an important role in ensuring stability.

In his letter, Singh reaffirmed support for the Bank of Canada’s independence and acknowledged the bank is following its mandate by raising interest rates, but warned the aggressive rate hikes would hurt workers.

As a potential recession looms, Singh called on the federal government to do more to protect Canadians, including addressing “corporate greed” and introducing long-promised reforms to the employment insurance program.