It is obviously unusual for a Member of Parliament to write to you to tell you of his reservations about a new increase in the key interest rate.
However, I am convinced that the rapid increases of recent months are seriously affecting the already fragile financial health of millions of households and I would like to share with you my experience in the field, which helps to better understand the impact of your decisions.
The messages I receive from people living in my riding bear witness to this. Every day, I speak with citizens who are, yes, affected by the rise in the cost of living, but also, increasingly, by the unbridled increase in interest rates on their loans.
This most often takes the form of rising housing costs that they own or rent, which, as you know, has the perverse effect of contributing to inflationary pressures.
I also visited several SMEs, many of which have been weakened by the years of COVID and which are now worried about seeing the cost of their loans rising rapidly. This also creates the risk of another inflationary effect, since some will transfer the increase in these costs to their customers.
In conclusion, since monetary policy transmission lags mean that recent rate hikes have not yet had their full impact on the economy, raising rates again would be like taking another dose of medicine right away. for the previous one to take effect. This is likely to cause more difficulties for our fellow citizens who are suffering than the evil we are trying to combat.
I therefore urge you to take a break from raising the key rate.
Haroun Bouazzi, MNA for Maurice-Richard, National Assembly of Québec