Why the CAQ’s proposed economic incentives may not be all they cracked up to be

“Many of the drivers of the inflation we are seeing today are coming from the supply and production side of the economy,” says Associate Professor of Finance Sebastien Betermier in an interview with CTV News. The war in Ukraine, post-pandemic recovery and supply side frictions are all factors outside our control contributing to inflation. The CAQ promises tax cuts and one-time payments to deal with inflation, to the tune of $600 if you earn less than $50,000 a year. According to Betermier, while targeted help is needed to help with inflation, providing large tax cuts and money transfers to the entire population could lead to rising demand again and worsen the underlying inflation.