At the risk of a recession and mortgage meltdown, the Bank of Canada is raising interest rates to avert the heavily debt-fueled recovery that Canada’s federal government and the bank itself helped cause. Yet, after two years of massive corporate bailouts and a quantitative easing experiment, the same officials now blame workers for seeking wage hikes to stay afloat.

In order to backstop stagnant wages, regulators allowed the Canadian economy to be pumped with ultracheap credit for years. Now credit agencies are increasingly warning that the inability of sweated workers to pay for basic necessities could spell disaster in the event of successive interest-rate shocks from the Bank of Canada.

“Some folks are falling back on credit in order to make ends meet,” said Wes Cowan, senior vice president at MNP Ltd. “People are facing higher prices for food and all sorts of essentials and some are relying on credit to get by.” Yet, with inflation likely approaching 8 percent, Bank of Canada governor Tiff Macklem has rapidly propelled interest rates from almost zero, last February, to 3.5 percent.