Alberta’s tactic of doling out cash fuels inflation rather than easing it: economists

Economists say provinces that pepper the public with cash to deal with rising prices are exacerbating inflation rather than alleviating it.

Travis Shaw says the move fails to suppress inflation because having extra money means people can keep spending and demand for products and services will remain high, keeping decades-high inflation at bay.

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Key points in Premier Danielle Smith’s televised speech

The senior vice-president of public finance at DBRS Morningstar says if people had less money to spend while prices were high, that would weigh on inflation and contribute to the Bank of Canada’s goal of taking some heat out of the financial system. pick up

His comments come a day after Alberta Premier Danielle Smith announced her Inflation Relief Act, which will hand out $600 over six months to families earning less than $180,000 for each child under the age of 18 or senior.

Smith will also index income support for inflation and provide an additional $200 in consumer electricity bill rebates throughout the winter months.

Quebec previously announced it would give people earning less than $104,000 a few hundred dollars, while BC increased tax credits and family benefits and capped rent increases at two percent.

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‘We’re not buying it’: Rachel Notley reacts to Premier Smith’s televised address