Maritimers brace for Bank of Canada rate hike

With so many Maritimers struggling to make ends meet, another interest rate hike from the Bank of Canada on Wednesday will be unwelcome news if it happens.

“I don't know what it’s going to do for people. We have people who are working and trying to pay mortgages and have cell phones and cars to get to work and they just can't do it anymore. There are two salaries coming into most of these homes,” said Linda MacRae, coordinator of the Glace Bay Food Bank.

MacRae spent Monday morning filling bags with groceries for those in need. It’s a job that takes more time with each passing day.

The client list here has grown more than 40 per cent in recent months.

“People are desperate. They're feeling defeated. The cost of living is putting more and more people into food banks,” said MacRae.

James Laird, co-CEO of Ratehub.ca, is expecting the Bank of Canada is going to increase a further 25 basis points.

A quarter-percentage point hike would send borrowing rates to the highest levels we’ve seen in almost 30 years.

Laird says the first group of people impacted will be those with variable rate mortgages and those with balances on home equity lines of credit.

Rates have risen steadily since the beginning of the COVID-19 pandemic.

“Our analysis suggested the impacts of the rate hike so far increases your payment by about 62 per cent and whatever happens on Wednesday will add to that,” said Laird.

The Canadian Taxpayers Federation says government deficits, and tax hikes helped push inflation to a 40-year high.

“Because the federal government is so in debt more than $1 trillion dollars, higher interest rates can also mean more money that taxpayers have to cough up to cover the government's interest charges,” said Franco Terrazzano, federal director.

Laird says the Bank of Canada wants to get inflation back to two per cent. He feels if this isn’t the last one, he thinks we are at least close to the end of rate hikes.