While inflation reached record levels in Canada (6.8% in April, the highest since 1991), the United States (8.5% in March, the highest since 1981), Europe (8. 1% in May, the highest since 1999) and everywhere else, governments around the world are putting in place measures to try to combat the soaring prices that are shaking up their country's economy.
A brief overview of certain measures taken to combat inflation.
Last March, when tabling its budget, the Legault government announced that it was giving a check for $500 to all people with an annual income of less than $100,000. On May 31, the Premier of Quebec promised to send another check to help Quebec households, if he is re-elected on October 3.
Doug Ford's government announced last April an 8% increase in the minimum wage, or $15.50 per hour, effective October 1, 2022.
Since April 1, Albertans have been shelling out less money at the pump due to the lifting of a provincial gas tax. This exemption from the tax, decreed by the Prime Minister, Jason Kenney, at the beginning of March, allows motorists to save 13 cents per liter of gasoline.
In March, the Alberta government also announced the payment of $150 to each household to help offset the cost of electricity during the first three months of the year.
Newfoundland and Labrador
The province will reduce the price at the pump by 8 cents until the end of the year. The government of Newfoundland and Labrador also announced on May 26 that the minimum wage will gradually increase to $15 an hour in less than a year and a half.
In addition, households whose income is less than $100,000 per year will be able to receive a check for $500 to help pay for their fuel oil.
On May 30, 2022, the Manitoba government introduced legislation that would allow it to raise the minimum wage beyond statutory increases when inflation in the province exceeds 5% in the first quarter of the calendar year.
On June 1, the government announced the introduction of a new emergency fuel and food benefit. This includes a one-time payment of $225 for low-income single people, and $450 for families. Since March, a total of $2 million has also been donated to food banks.
The minimum wage increased by 45 cents on June 1 to $15.65 an hour. This increase announced in March is based on the rate of inflation. This is the highest minimum wage in Canada.
Prince Edward Island
In March, the government promised to offer a $150 check to people earning less than $35,000 a year, and $100 to those earning between $35,000 and $55,000.
A plan to reduce the price of public transit in the province is also planned. The monthly pass could cost $20 for adults, $10 for students and seniors, and will be free for children.
A gradual increase in the minimum wage was announced in early May by the province. It should thus reach $15 per hour on October 1, 2024.
In January 2022, the province decided to gradually increase the minimum wage so that it reaches $15 per hour in 2024. Currently, the minimum wage is $13.35 per hour.
A one-time payment of $150 to all income assistance and disability support recipients was also announced in March. Another $150 was also offered to citizens eligible for the heating assistance program. Just over $1 million was donated to help food banks.
Last year, the Yukon government decided to index residential rent increases to inflation. The measure entered into force on May 15, 2021 and will remain in effect until January 31, 2023.
On May 10, the President of the United States Joe Biden declared that the fight against inflation was his "main economic priority" and recalled that it was the role of the American Central Bank (Fed) to limit the rise prices and to ensure full employment. The latter has already started to raise its key rates to slow consumption and investment should continue.
The President of the United States has also mentioned other measures, such as increasing taxes on the wealthy and multinationals, reducing childcare costs, but these measures require that Congress pass legislation.
Mexican President Andres Manuel Lopez Obrador announced on May 4 that he had reached an agreement with the private sector to stabilize the prices of 24 essential products by October.
Since February, France has put in place a freeze on gas and electricity prices. Other measures are planned, after the legislative elections in June. Among them, a revaluation of pensions, increases for civil servants, a reduction in contributions for the self-employed and a food check for the most modest households.
London has released 15 billion pounds (about C$23 billion) in aid for the most disadvantaged households. This aid is financed by a 25% tax imposed on the profits of the oil giants.
Since March, public heating aid in Germany has doubled for the most vulnerable households. An additional aid program of several billion euros was also recently voted in Parliament. In particular, it provides for the introduction of a 9-euro (CAN$12) ticket giving access to all public transport in the country this summer and a payment of 300 euros (around CAN$400) to all taxable employees. The fuel tax will also be lowered, between June and August, to the European minimum, i.e. a drop of 14 to 30 cents per litre.
The government announced a reduction of about 30 centimes per liter in fuel taxes, the imposition of a 25% tax on the profits of companies in the energy sector, as well as a check for 200 euros ( 270$ CAN) for Italians with an annual income of less than 35,000 euros (47,000$ CAN).
From April 1 until June 30, Spaniards benefit from a subsidy of 20 euro cents per liter of fuel (15 cents financed by the state and 5 cents by the oil companies). Madrid's aid plan, announced at the end of March, also provides for the limitation of rent increases to 2% and a 15% increase in the minimum subsistence income.
Sweden announced in March a tax reduction of 1.30 crowns per liter of diesel (about 12 cents), until October 31.
Belgium and the Netherlands
The two countries have decided to lower the VAT on natural gas, electricity and district heating and to reduce the tax on fuels.
The country has capped staple food prices since February. Cars registered in the country can benefit from a fuel price freeze at around 1.2 euros (around C$1.61).
At the end of May, the Australian government introduced a series of measures, such as the halving of the petrol tax, one-off payments of $250 AUD (about $230 Cdn) for people with low and middle incomes.
The New Zealand government announced in May that it would distribute a few hundred extra dollars to more than two million low-income citizens to help them. Payments of $350 NZD (approximately $290 CAN) over three months will be distributed in August for those who earn less than $70,000 NZD (approximately $55,000 CAN) per year. The government also announced a reduction in gasoline taxes and half-price public transport fares.