Rate hike bad idea, premier tells bank

frank gunn/the Canadian press

Premier Dalton McGuinty says while the economic recovery has taken hold, it’s a modest recovery and not by any means a vigorous and robust recovery.

Ontario inflation
Ontario is seeing higher inflation than other provinces, largely due to the July 1 implementation of the HST.

Consumer prices in Ontario rose 2.9 per cent in July — the largest year-over-year hike among the provinces — with the HST accounting for about 1.3 per cent of that increase.
The Bank of Canada is meeting Sept. 8 to set interest rates, currently at 0.75 per cent.
Statistics Canada reported Tuesday that growth fell two per cent in the April-to-June quarter, more than economists expected.

Published: September 02, 2010 5:15 a.m.

Last modified: September 01, 2010 10:18 p.m.

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Canada’s economic recovery is still fragile and its leaders should be careful about doing anything that would increase expenses or drive up costs, Premier Dalton McGuinty said yesterday.

“My advice to the Bank of Canada is: Just no more interest rate hikes — not at this point in time,” he said.

The premier, who rarely wades into monetary policy, urged the central bank to put the brakes on any further hikes amid fears the United States may slip into a double-dip recession.

McGuinty made the remarks from a Toronto elementary school where he was promoting a new expense for Ontario: Full-day kindergarten for four- and five-year-olds.

The self-described education premier announced plans last fall to forge ahead with the costly project despite the economic downturn and warnings of a record-setting deficit.

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