According to Carmichael (2022), Canada is facing an inflationary period that is characterized by a rise in the prices of commodities, with many people being worried about their ability to afford these commodities. The current inflation is not only being experienced in Canada but around the world. Understandably, the current inflation in the country has been caused by various factors (Carmichael, 2022). For instance, supply chain issues around the world for goods that are sourced from other countries have significantly contributed to high inflation during the COVID-19 pandemic (Mallees, 2022). There has been a steady demand for goods in Canada and around the world; however, the supply of these goods has failed to meet this demand. The failure has been largely due to labor constraints and logistical problems linked to the pandemic.
Currently, the control of inflation in the country is the responsibility of the Bank of Canada, as it is legally mandated to manage the money supply in the country (Mallees, 2022). It can lower interest rates; thereby, reducing borrowing and spending costs. It can do this until Canada’s economy has been revived. It is highly unlikely that inflation will continue being a problem for the country’s economy, as the Bank of Canada will have to be involved to maintain stable inflation.
Carmichael, K. (2022). Inflation surges to three-decade high, adding pressure on Bank of Canada to raise rates. Financial Post. https://financialpost.com/news/economy/canadas-inflation-rate-tops-5-for-the-first-time-in-31-years
Mallees, N. (2022). Here’s how inflation works and what can be done about rising prices. CBC. https://www.cbc.ca/news/business/inflation-business-explainer-1.6362093