BC government considering inflation-specific reimbursement to manage rising costs


British Columbia Premier John Horgan said the province is considering providing money to people through the Climate Action Tax Credit and is also considering a specific refund to deal with the ‘inflation.

This comes as the Bank of Canada on Wednesday raised its key interest rate by one point to 2.5%.

Rising interest rates are a clear sign that the central bank is trying to manage inflationary pressures, but also an indication that things have gotten hotter than expected.

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The Governor of the Bank of Canada explains why the announcement of key interest rates came relatively suddenly

The Governor of the Bank of Canada explains why the announcement of key interest rates came relatively suddenly

“In COVID, we got people cash quickly and I think we can do that again. But it’s a huge task to build these programs. There’s no inflation program in anyone’s budget. It takes time to work these things out,” Horgan said in an interview with Global News.

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“If we’re going to put in another program, we’re going to have to start from scratch.”

The province’s COVID-19 rebate was promised during the election and delivered, but cannot be replicated as confidential information collected for distribution has been destroyed due to privacy laws.

Current inflation rates in British Columbia are the highest in about 40 years. The province had the highest gas prices on record in North America, with a liter of fuel costing over $2.70 per litre.

Gasoline prices have now fallen in Metro Vancouver to $1.99 per litre, but food prices remain very high.

The average grocery bill rose 8.8% in May compared to a year ago in Canada.

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‘A big shock’: Canadians feel stuck with Bank of Canada interest rate hikes

Horgan says drivers are still getting a one-time $110 rebate through ICBC to help offset the price of gas.

He also asked Finance Minister Selina Robinson to put additional measures in place. This includes measures through the tax system to return credits to people through quarterly payments using the Climate Action Tax Credit.

“British Columbians want to know what we’re doing to reduce costs for them,” Horgan said.

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“We were hoping to see a moderation not just in gasoline prices, but in inflation. We must be attentive and responsive. »

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As fuel prices soar, ICBC’s gas discount may not arrive until mid-July for some drivers

The increase in Bank of Canada interest rates will also have an impact on the province’s borrowing capacity.

The province currently has a AAA credit rating, but Horgan acknowledges that any rate increases will impact what the government can deliver.

“We have the best borrowing rate in the country, but now we will be paying more interest and that will impact our capital budgets as well as service delivery,” Horgan said.

© 2022 Global News, a division of Corus Entertainment Inc.

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