Justin Trudeau tries to find a cure for 'inflationitis'

If the political and public policy challenges posed by inflation were easy to overcome, more governments would have done so by now.

Instead, recent elections have shown the current moment to be, in the words of the Financial Times' John Burn-Murdoch, "arguably the most hostile environment in history for incumbent parties and politicians across the developed world."

In fairness, inflation probably doesn't explain everything about the defeats incumbents have suffered over the past year. But the frustrations and anxiety caused by higher prices seem to be one significant common denominator — the factor David Coletto, the pollster at Abacus Data, recently dubbed "inflationitis."

Political leaders, Coletto argued, needed to respond with "empathy and transparency, acknowledging the real struggles people are facing."

"Their actions must feel like help," he wrote earlier this month. "They can do things that are perceived to provide immediate, practical, and universal relief — measures like tax cuts or direct payments or rebates. Price controls or reducing fees and tolls on essential services can also signal to voters that their governments and leaders get it."

On Thursday, Prime Minister Justin Trudeau and Finance Minister Chrystia Freeland turned up at a grocery store in Sharon, Ont. to announce a two-month pause in federal sales tax on a number of household goods, along with plans to send 18.7 million Canadians a cheque for $250 in the spring.

"These are things that recognize that people are squeezed," Trudeau said, "and we're here to help."

Regardless of whether this will do anything to cure what ails the Liberal government — or whether it was the ideal policy response — what Trudeau and Freeland announced on Thursday at least had the virtue of being immediate and broadly practical.

The opposition parties were, unsurprisingly, unimpressed.

Demonstrating once more his flair and fondness for alliteration, Conservative Leader Pierre Poilievre dismissed Trudeau's announcement as a "two-month, temporary tax trick," motivated entirely by the political self-interest of the Liberals (and the New Democrats, who are likely to support the government on these measures). Mind you, Poilievre also stopped short of saying he'd vote against legislation to implement the changes.

Poilievre's argument is that Canadians would be better off if the Liberals instead repealed the federal carbon tax. That longstanding position of the Conservative leader still fails to account for the greenhouse gas emissions that the consumer carbon tax is expected to eliminate. But Poilievre also dismisses entirely the fact that the revenue generated by the carbon tax is rebated to households.

If (as successive reports by the parliamentary budget officer have found) many households — particularly those with lower incomes — actually receive more from the rebate than they pay in additional costs created by the tax, then many Canadians would actually be left worse off if the policy was repealed.

While claiming credit for the government's move on the GST — and even insisting the Liberals "caved" to a demand outlined last week — NDP Leader Jagmeet Singh also said Thursday's announcement was a "letdown" because the sales tax exemption was only temporary and didn't cover monthly bills. Perhaps that sets the Liberals and NDP up for further negotiations around the budget next spring (assuming this Parliament gets that far).

But for now, Tuesday's moves appear to clear the way for a temporary break in the Conservative filibuster that has tied up the House of Commons for nearly two months. Though the New Democrats apparently aren't yet willing to completely break the logjam, they are at least ready to help the government move for a brief pause that would allow the House to pass the legislation necessary to implement the GST break.