Stimulus not the cause of Canada's inflation problem, says former Bank of Canada governor

Former Bank of Canada governor Stephen Poloz says government spending and stimulus are not to blame for increased inflation.

"I think that's not right," he said during an interview on CTV's Question Period airing Sunday. "In fact, what the stimulus did was to keep the economy from going into a deep hole in which we would have experienced persistent deflation."

Inflation has reached 4.7 per cent, according to the latest numbers released by Statistics Canada in October. The Bank of Canada expects it to peak at the end of this year and start to decline in the latter half of 2022.

"We have to accept the fact that policy [stimulus] response was in the right time, well intended and it did avert all the worst calls that people were making at that time," he said.

In response to affordability concerns, the federal government has repeatedly referenced their national childcare program, as a means to combat higher costs of living. Nine provincial and territorial governments have signed childcare deals with the federal government, while Ontario and New Brunswick have yet to sign on.