Bank of Canada Should Keep Overnight Rate at 0.25 Percent, Support Financial Market Stability through COVID-19 Crisis: C.D. Howe Institute Monetary Policy Council
April 9, 2020 – The C.D. Howe Institute’s Monetary Policy Council (MPC) recommends that the Bank of Canada maintain its target for the overnight rate, its benchmark policy interest rate, at 0.25 percent for at least a year.
The MPC provides an independent assessment of the monetary stance consistent with the Bank of Canada’s 2 percent inflation target. William Robson, the Institute’s President and CEO, chairs the Council. Council members make recommendations for the Bank of Canada’s upcoming interest-rate announcement, the subsequent announcement, and the announcements six months and one year ahead.
Although the votes for individual members varied somewhat (see table), reflecting the unusual crisis-…
Canada Must Be Champion of Open Trade: C.D. Howe Institute Crisis Working Group on Business Continuity and Trade
April 9, 2020 – Canada must champion open international trade and remain an ‘honest partner’ in the face of a worrying trend among G7 nations towards export restrictions on critical goods, says the C.D. Howe Institute’s Crisis Working Group on Business Continuity and Trade.
The group of economists and industry experts, co-chaired by Dwight Duncan, Senior Strategic Advisor at McMillan LLP and former Ontario Minister of Finance, and Jeanette Patell, Vice-President of Government Affairs and Policy for GE Canada, held its third meeting on Tuesday, April 7, 2020. They emphasized that open international trade is essential to Canada – both in the immediate crisis and for the long-term. The working group observed a worrisome tide…
COVID-19 Response Lacking Information and Supplies: Crisis Working Group on Public Health and Emergency Measures
April 8, 2020 - Addressing the poor coordination of laboratory infrastructure and shortages of personal protective equipment for frontline workers must be the top priority for health officials, according to the Institute’s Crisis Working Group on Public Health and Emergency Measures. In addition, proactive guidance for health care providers and institutions about appropriate practices for directing limited supplies and their reuse would reduce the negative effects of shortages in critical supplies where they arise.
The group also noted there are still places and populations where rapid testing, widely deployed, with rigorous contact tracing and isolation could keep the virus at bay.
…Provinces Will Require Support to Finance Increased Borrowing: Crisis Working Group on Monetary and Financial Measures
April 7, 2020 - Many provinces will face greater difficulties financing the revenue gaps and spending demands from COVID-19 as funding pressures continue to mount. While subnational governments have so far been successful in financing their increased borrowing, many provinces are in worse shape relative to their fiscal positions before the last financial crisis. Furthermore, the loss of provincial revenue from tax deferments will require increased debt financing, putting additional funding pressures on governments whose financial positions are already precarious.
First and foremost, federal officials must support the functioning of markets for provincial debt. To this end, the Crisis Working…
Data Vital Tool for Individuals, Businesses, Decision-Makers: Crisis Working Group on Household Income and Credit Support
April 3, 2020 - The C.D. Howe Institute’s Crisis Working Group on Household Income and Credit Support held their second meeting on March 31, 2020 to identify and prioritize key policy challenges during the COVID-19 crisis, and consider policy options and recommendations. The group is comprised of Canadian business leaders and economists and chaired by Michael Horgan, Senior Advisor at Bennett Jones LLP and former Deputy Minister of Finance, Government of Canada.
The working group calls for:
Quicker release of economic data indicators to provide a current and accurate picture of the state of the labour market, enabling individuals, businesses and decision-makers to make informed decisions, Fortification and clarity…