Tag Archives: Bank of Canada

Roundup: Exit McKenna

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It’s now official – Catherine McKenna is bowing out of federal politics, citing that she wants to spend more time with her kids while she can (the oldest is off to university next year), but insisting that she still wants to do her part to fight climate change in other arenas. This was immediately met with questions about whether this is a signal that it can’t get done in government, which she flat-out denied, but we should remember that the federal government is limited in what it can do, because it only has so many policy levers at its disposal (which we should all realise after living through those limitations in this pandemic).

https://twitter.com/AaronWherry/status/1409621322649440256

McKenna, who also stated flat-out that she’s not going to run for mayor, dismissed the attacks against her as “noise,” and that they weren’t successful because she did the work of getting the carbon price in place, and made more tangible progress on the environment file than we’ve had since the Mulroney era. But we can’t forget that the abuse was real, it was horrific, and she needed police protection because the threats were so bad. This should be one of those moments of reflection about where we are as a society that these kinds of misogynistic are able to keep happening with little to no recourse for the victims, and few consequences if any for the perpetrators. McKenna did note that she does still want to work with social media companies to address this, but we’ll see if anything actually happens.

https://twitter.com/cathmckenna/status/1409522139380785157

Of course, this has entirely been overshadowed by the spectre of Mark Carney entering the political arena, which he categorically should not, because even if he’s been out of the Bank of Canada for seven or eight years, it still has the possibility to taint the institution by association, and him declaring himself to be sympathetic to the Liberal cause is not helping either – especially given that Pierre Poilievre is currently attacking the institutional independence of the Bank by positing that they are somehow in cahoots with the government, and that they are simply “printing money” to finance the government’s deficits which will drive up inflation – entirely ridiculous notions given that quantitative easing is not actually “printing money” and that their whole mandate is to control inflation at around two percent, which they have been very good at. Nevertheless, people are believing Poilievre’s bullshit (especially as other media won’t actually call it out as such), and this will only get worse if Carney actually enters the political arena. And because the media and the pundit class have decided that they like this narrative of Carney being some kind of heir apparent and saviour, they are trying to make it happen, damn the consequences. It’s not a good look, and yet here we are.

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Roundup: Lies about inflation and the central bank

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For weeks, the Conservatives (and Pierre Poilievre in particular) have been making a bunch of bogus and nonsensical attacks against the government and what they term the “inflation tax,” which makes absolutely no sense, but is predicated on the wild notion that the Bank of Canada is allegedly printing money to finance the government’s “out of control” deficits, and that this is going to drive up inflation and turn us into Venezuela. It’s bullshit – the Bank of Canada is independent from government (and it should be shocking that the Conservatives are suggesting otherwise given the history of the independence of the central bank in this country), quantitative easing is not “printing money,” and given that a year ago, in the early days of the pandemic, we were facing deflation as a country, an expansionary monetary policy was the right move to make. We’re still in need of stimulus, because the recovery has been so uneven, but the Bank of Canada knows this, because it’s their job.

https://twitter.com/trevortombe/status/1405250437838610432

With this in mind, it was no surprise yesterday that when the inflation figures were reported, the fact that it clocked in at an annualized 3.6% had the Conservatives, and Erin O’Toole in particular, trying to make hay of this – and media outlets didn’t help with their headlines that this was the highest rate in a decade, without putting that in proper context. Now, part of that is the base effect of last year’s massive drop, which is going to take time to work itself out in the data; but it’s also in part based on factors from right now, the most important of which is housing prices, which have skyrocketed as demand has outstripped supply. None of this is a surprise, and none of this has anything to do with the size of the federal deficit or the Bank of Canada’s quantitative easing, and yet that is the narrative being painted. It didn’t help that O’Toole’s examples lacked any logical consistency, such as blaming increases in post-secondary education on the federal government, when that’s a provincial jurisdiction. Not that truth matters.

https://twitter.com/MikePMoffatt/status/1405152487821168642

Compounding this, however, is the completely irresponsible way in which this was being spun by shows like Power & Politics, where the framing was “the cost of everything is going up!” followed by asking panellists if the government should do something about it. And to their credit, most of those panellists said no, leave it for the Bank of Canada, but the fact that the host kept torqueing this notion about “prices are rising!” and trying to constantly get people to say something – anything – inflammatory about inflation, was not only irresponsible, but shows actual contempt for proper economics reporting by the gods damned CBC. They don’t care about actual information or reasonable discussion, they want the false balance of opposed partisans battling it out, and the “drama” that creates. It does such a disservice to everyone that it amazes me that they can get away with it.

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Roundup: Ford turns to the Notwithstanding Clause – again

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The sudden comfort with which premiers are deciding to invoke the Notwithstanding Clause is getting a bit uncomfortable, as Doug Ford decided he needed to invoke it after a court struck down his attempts to limit third-party spending in provincial elections in a somewhat arbitrary fashion (given that unions get together to form American-esque political action committees in this province). While you can find a great explainer on Ford and his particular legal challenge in this thread, the more alarming part is the apparent need to reach for the “emergency valve” of the Clause before even appealing the decision to the Court of Appeal or the Supreme Court of Canada.

There is a perfectly legitimate reason why the Notwithstanding Clause exists, which as to do with keeping a certain amount of parliamentary supremacy in lawmaking, and it gives governments an avenue of recourse if there is a fundamental disagreement with a court’s interpretation of legislation. But lately, it’s being invoked by premiers who know they are trying to push through objectionable legislation – François Legault did it with Bill 21, which the courts have essentially said blocks their ability to strike down any portion of the law, and he’s doing it again with his Bill 96 on trying to obliterate any bilingualism in the province (the same bill that seeks to unilaterally amend the federal constitution). Ford had threatened to invoke it to ram through his unilateral changes to Toronto City Council while they were in the middle of an election, but ultimately didn’t because of a court injunction, and his decision this time is similarly dubious. This willingness to invoke the Clause at the first sign of court challenge or on the first defeat is a very big problem for our democracy, and we should be very wary about this abuse of power, and punish these governments appropriately at the ballot box during the next elections for these decisions.

https://twitter.com/EmmMacfarlane/status/1402715067083280387

In the meantime, here’s Emmett Macfarlane with more thoughts on the court decision that led to this turn of events.

https://twitter.com/EmmMacfarlane/status/1402711628978720772

https://twitter.com/EmmMacfarlane/status/1402712563960455173

https://twitter.com/EmmMacfarlane/status/1402713058913525761

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Roundup: Poilievre wants to lie to you about inflation

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StatsCan released the April inflation figures yesterday morning, and for the unprepared, they look bad – a 3.4 percent increase year-over-year, when the Bank of Canada’s inflation target is around two percent. This may look alarming, but there is a very simple explanation for why it looks high, and it’s something they call the base effect – meaning, when you compare it to last year’s figures, you need to put those figures in context. In this case, when you look at the April 2020 figures, we were actually suffering deflation in the early throes of the pandemic, when the first real lockdown started, and everyone was being sent home. We’ve had a fair degree of economic recovery since then, and inflation is really still running a little below target, but that gets obscured by the base effect, and that will likely carry on for another couple of months.

The problem, of course, is that you have media outlets that won’t properly contextualise this, looking at how much year-over-year prices like gasoline have spiked – which again, ignores that a year ago, gasoline prices dropped to an eleven-year low because demand cratered as a result of the pandemic. It’s a better headline to talk about “price surges” rather than explaining that base effect. And to be fair, some prices have gone up for a variety of factors, while others haven’t – it’s why the consumer price index looks at a basket of goods and provides an average, where some prices rise and some fall, and they provide additional measures that will strip out some of the volatile indicators to see how the more stable ones are faring. And more to the point, the Bank of Canada knows what they’re doing, and if they see runaway inflation starting, they will tamp it down with the tools available to them, such as interest rates.

But more than just media outlets, we have the Conservatives and Pierre Poilievre in particular who are determined to light their hair on fire and lie about the inflation figure in order to denounce the government (blaming it on deficit spending) or by saying that the Bank of Canada is in cahoots with them (when they are independent of government and kept at arm’s length). And lo, Poilievre even produced a video that railed about the price of lumber to make his point – err, except the price of lumber isn’t increasing because of the monetary supply or deficit spending. It’s rising because there is a housing boom, particularly south of the border, and lumber exports can’t keep up with demand, hence the price increases. That’s basic economics, which you think that the party that bills itself as “good economic managers” and the “party of the free market” would understand, but apparently not. And more to the point, we can be assured that Poilievre will neither a) read a gods damned report from Statistics Canada beyond the headline to understand what’s going on; or b) tell the truth when he can whip up hysteria for the sake of scoring points. And because they will quote statistics in a way that strips it of its context, they will lie to the public, and the media will do very little about it – at most, both-sidesing the comment rather than calling out the simple falsehoods.

Meanwhile, Poilievre’s antics were perfect to turn themselves into memes. It’s probably just as well.

https://twitter.com/maxfawcett/status/1395103214681300992

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Roundup: The meltdown over NACI

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There was a collective meltdown yesterday as the National Advisory Committee on Immunization delivered its most recent recommendations, saying that they recommended that the Johnson & Johnson vaccine be deployed for those over 30 (even though the current supply in the country is currently on hold pending a review of its quality control), and then cited that mRNA vaccines remained their preferred candidates – and everyone lost their minds.

This is not really unexpected if you have been paying attention, where the chair of the committee in particular has said that because of the “safety signal” attached to AstraZeneca related to the particular blood clots (which are very serious – there is a reasonably high fatality rate related to them) that it would be preferable to get mRNA vaccines, but if someone could not wait for them, then they should get the first available vaccine, even if it’s AstraZeneca. In their minds, it’s about being transparent around the risk factors associated, and they’re right. It’s just that this makes it harder for governments and public health officials to carry on with message that the best vaccine is the first one you are offered. Both are correct, and NACI has a lot of nuance in their guidance that is difficult for people to parse effectively, which is a problem, but it’s a question of whether the problem is NACI’s in how they communicate their guidance, or a problem in particular with media who are supposed to be able to take complex issues and translate them to the public, and yet are not very good at it (often walking away from these releases citing that they are “more confused than before,” which they shouldn’t be if they paid attention). It especially isn’t helped when certain journalists, talking heads, and especially certain MPs conflate the very different roles that NACI and Health Canada have, and try to assert that they should always be “on the same page” when they have different roles. Health Canada determines the safety of the vaccines, NACI offers guidance on the best way to deploy them, factoring in the current local epidemiology and vaccine supplies – guidance which provinces can accept or reject. It’s also why that guidance is always changing – they are reacting to current circumstances rather than just offering a simple recommendation once and being done with it, which most people are not grasping. And they have operated pretty much invisibly for decades, because there hasn’t been the kind of public attention on new vaccines up until now, which is why I really dislike the calls by people to “disband NACI” after yesterday’s press conference.

I get that people want clear binaries, and simple instructions, but that’s not NACI’s job, really, and expecting them to change their way of communicating after decades is a difficult ask. There is a lot of nuance to this conversation, and I will point you to a couple of threads – from professor Philippe Lagassé here and here about this kind of advice and how it’s communicated to the public; as well, here is hematologist Menaka Pai, who talks through NACI’s advice and what it means.

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Roundup: Offering disinformation in a clownish motion

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Yesterday was a Supply Day for the Conservatives, and they decided to push a motion about access to vaccines – but because they are committed to a certain number of narratives that don’t belong in the real world, it was about as cartoonish as one might expect.

Part of the premise of why this so ridiculous is because the notion that sufficient vaccine supply could have been delivered in January and February – let alone right now – belies a belief that we live in some kind of post-scarcity society like in Star Trek: The Next Generation, where replicator technology basically eliminates these kinds of problems, such as supply chain issues, or the time it takes to scale up manufacturing, or the time to actually make the vaccine itself. It also seems predicated on the belief that Canada is apparently the only country in the world suffering from the pandemic, and that we should have some kind of claim to all of the vaccine first (even though we were far less badly hit than many, many other countries). There is a blatant falsehood in the motion where it claims that it was the federal government that recommended that the interval between first and second doses be extended to four months – that was not a federal decision. It was a recommendation by the arm’s length National Advisory Committee on Immunization, and they weigh their recommendations based on the current epidemiology, and it was in there considered opinion that there was a greater good in getting as many people their first dose as quickly as possible given supply constraints, and that the four months is likely to shrink as more doses arrive. More to the point, provinces decide whether or not they will accept NACI’s guidance or not, and not the federal government. The inclusion of this in the motion is pure disinformation designed to stoke anger. Finally, it ignores that the reason there are increasing “lockdowns” (and in most parts of the country, they’re not real lockdowns) are because premiers failed and didn’t properly control spread – most especially in those provinces where they re-opened too early, in spite of warnings that the new variants would cause spread faster, and yet they went ahead and did it anyway. This, again, is not on the federal government and it was always a fallacy that we could have vaccinated our way out of the second or third wave without lockdown measures.

https://twitter.com/robert_hiltz/status/1387827704204906497

https://twitter.com/robert_hiltz/status/1387847095357485057

 

Of course, this is happening in the shadow of an oncoming surge of new vaccine deliveries, which has Ontario and Quebec are promising that everyone should be eligible to get a first dose before the end of May, which is not far from what O’Toole and company were demanding in their clownish motion. So, was this is a play to try and claim victory when the vaccination numbers start to climb? Or is this just a play to the base where facts don’t matter when there are emotions? Either way, it’s not the best look for the party that considers itself the government-in-waiting.

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Roundup: Emergency finger-pointing

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Sometimes I question the naïveté of certain politicians in this country, but the belief in the utility of emergency debates is one of those things that apparently never gets old. Last week, the Commons held an emergency debate on the state of Laurentian University, which was a bit odd because that really falls under provincial jurisdiction, but sure, at least give speeches about it for all of the good it would do. The fact that Charlie Angus got up in Question Period the following day and sounded shocked that nothing came of it was perhaps a bit tough to swallow. (For the record, the minister of official languages – relevant since Laurentian served a large population of Franco-Ontarians and had French-language education that is now on the chopping block – said she is waiting for the province to come up with a plan before she can do anything, because jurisdiction).

Last night was no exception to this belief in the goodness of parliamentary debate, as Elizabeth May was granted a request for an emergency debate on new COVID variants. Surprising nobody, except possibly her, it quickly devolved into a bunch of finger-pointing and reinforcing of existing narratives, most of them false. The NDP, for example, went hard after their new demand that the Emergencies Act be invoked for Ontario, and the Conservatives continued their bogus insistence that Canada could somehow have been fully vaccinated before the end of February, which ignores pretty much every single variable, from vaccine supplies, production levels, and the fact that this virus grows exponentially, while you vaccinate linearly. And this was, of course, followed by Liberal “sadness” at misinformation being peddled by opposition parties.

The lead for the CP story on the debate was telling. “An emergency parliamentary debate that was supposed to be a forum for cross-party collaboration on better ways to combat the COVID-19 pandemic…” is a fairy tale opening. There is no way this was going to be a pleasant collaborative session full of genteel and helpful exchanges. Parties have committed to narratives that seek to pin the blame on Justin Trudeau rather than provincial premiers, and committing fully to Green Lantern Theory, as though it can overcome jurisdictional boundaries and the constitution itself. More to the point, there is nothing more useless in Parliament than an emergency debate. It is merely an excuse for MPs to read speeches into the record for several hours to show they are concerned about something, but it means nothing in the bigger picture, other than another clip for an MP’s social media channels.

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Roundup: Ending the defence committee study

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Something unexpected happened yesterday, in that the Defence committee voted to end the study on the allegations against General Jonathan Vance – the Liberals moving the motion, and the Bloc supporting it (which was the real surprise). Of course, ending the study comes with a number of different narratives. For the Conservatives and the NDP, this is all about the government trying to “cover up” what happened, because they won’t allow staffers to testify – nor should they. The concept of ministerial responsibility is inviolable in our constitutional framework, and the government should be fighting to maintain it, and yes, they have put the minister forward in this case several times, so that does matter. For the Liberals’ decision to move to end the study, it’s also at the request of some victims’ groups, who have stated that every past government is at fault, and that the committee is simply using the victims in order to score partisan points – and they are 100 percent correct in that assertion.

I do find it disturbing, however, that in most of the reporting on what has gone on, media have followed the opposition narrative that staffers are being “blocked” from appearing, and that the only time that ministerial responsibility is mentioned, it’s in quotes and being both-sidesed in terms of the government’s response. This is a real problem because it is undermining this fundamental principle in our democracy. This is something that should be explained, including why it’s wholly improper for the opposition to be demanding that this important principle be violated, and why when the Conservatives were in government, they repeatedly invoked the same principle as well to keep their staffers away from committee. Constitutional principles matter – they’re not just to be dismissed as a “process story” as so many journalists and editors are wont to do in this city, and it cheapens the discourse when this context is being left out of the stories, and when the government’s correct position is being spun as being improper.

Of course, if the government is going to claim ministerial responsibility, that doesn’t just mean Sajjan has to show up (which, to his credit, he did for six hours) – Sajjan has to actually take responsibility as well, and he hasn’t. And more to the point, Sajjan should fall on his sword for this, because he did drop the ball. He remained way too incurious about the allegations and whether an investigation was being carried out – which is not the same as involving himself in the investigation or meddling in it. It’s basic due diligence for someone who is responsible to Parliament for the armed forces and its leadership, and he failed in that due diligence. Sajjan has no choice but to resign over this, and it will be a giant sign that Justin Trudeau is not taking this seriously if he doesn’t insist on a resignation in short order.

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QP: Blaming the lockdowns on vaccines

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With Ontario back under a “stay-at-home order,” the numbers in the Chamber are again back to bare-bones, with the Liberals once again resorting to only keeping Mark Gerretsen in the Chamber and no one else, with only two NDP MPs present, and four Bloc MPs. Additionally, those Bloc MPs stayed out of the Chamber until after the moment of silence for the death of Prince Philip was over, because they really are that petty about our constitutional monarchy. Candice Bergen off for the Conservatives via video, and she recited the party’s bullshit assertion that the lack of vaccines was responsible for the current round of “lockdowns,” which serious people know was never the way out of the second or third waves. Anita Anand replied by pointing out that Canada surpassed their targets for receiving vaccines by over 3.9 million doses. Bergen then lied and claimed that the Americans issued a travel advisory to Canada last week — that advice had been in place for months and is the same as every other country — for which Patty Hajdu reminded everyone that now is not the time to travel. Bergen complained more about “lockdowns,” to which Hajdu reminded her that even with vaccinations underway that people still need to adhere to public health measures, and that the federal government doesn’t determine local advice. Gérard Deltell then took over in French to proffer the ridiculous complaint that the Americans have fully vaccinated ten times more people than Canada has, and insisted the federal government failed. Anand repeated her response about vaccines delivered, and when Deltell condescended to her about the quality of her French before complaining she didn’t answer the question, Anand repeated that vaccines were ahead of target.

For the Bloc, Alain Therrien complained that the government was practicing “predatory federalism” by attaching strings to future transfers in the budget, which Sean Fraser refuted with listing increased transfers to the provinces. Therrien was not convinced, but Pablo Rodriguez discounted his concerns as rumours, as they were working well with the provinces.

Jagmeet Singh led the NDP, and in French, he complained that the third wave was getting worse, and that the federal government needed to improve paid sick leave — which is provincial jurisdiction in 94 percent of workplaces. Rodriguez again responded by reminding him of federal supports and working with the provinces. In English, Singh declared that Ontario is “on fire” and made a pitch for Green Lantern Theory, including so-called federal support for vaccinations, to which Hajdu reminded him that the field hospitals set up in provinces that need it are from the federal government.

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Roundup: Mark Carney undermines his Bank of Canada successors

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When it was announced that former Bank of Canada governor Mark Carney was going to be speaking at this weekend’s Liberal convention, we got the usual amount of tongue-wagging from journalists and pundits who assumed that this would be the time when he announced he was running for the party. The Conservatives put out a nasty press release that considered him the “future leader of the Liberals,” as though this was a replay of the Michael Ignatieff trajectory. Carney didn’t make any announcements of future plans, but he did the next worst thing – he stated that he planned to support the Liberal Party in any way he could.

This is bad. This is very, very bad. I have written about this before, but the Bank of Canada is an institution that needs to be scrupulously independent, much like the Supreme Court of Canada. Monetary policy is not to be trifled with, and the separation between fiscal policy (government and the Department of Finance) from monetary policy (Bank of Canada) is sacrosanct in our system. We had a bona fide political scandal about maintaining this separation decades ago, which was the Coyne Affair, and it led to changes that guaranteed the central bank’s independence. This is why, much like Supreme Court justices, former Bank of Canada governors need to maintain their scrupulous independence after office, because the danger of tainting the institution is too great. Because what are we going to see now? All monetary policy decisions will be viewed through the lens of partisan politics and opportunism – which is toxic to the institution. Opposition MPs will start badgering and hectoring the current Governor when he appears before committee and assuming partisanship in his advice and policy direction – something that we are already getting dangerously close to, as Pierre Poilievre tried to go after the Governor over the decision to buy bonds through the current fiscal crisis (which is perfectly sound expansionary policy at a time when we were seeing deflation instead of the kinds of inflation that the Bank is trying to target). This matters, no matter how many Liberal partisans seem to think that this is something they can just handwave away because he said nice things about them.

If Liberals had a modicum of respect for institutions that they claim they have when those institutions are under attack by the Other Guys, then they wouldn’t keep doing this, and yet it happens time and again. They undermined the Senate, the Governor General, and now the Bank of Canada. They have become an absolute menace to the systems and institutions that are at the heart of how our country operates. This is a problem.

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