The Bank of Canada’s mandate: steady as she goes – Financial Post Op-Ed
On Monday the Bank of Canada and Government of Canada finally announced the renewal of their agreement concerning the country’s monetary policy framework. The announcement reconfirmed their joint commitment to the two per cent inflation target within a band of one to three per cent. With the current agreement expiring at the end of the month, the down-to-the-wire announcement had led some pundits to expect a major surprise, and even in the follow-up coverage there are hints some believe this is what happened. We do not see it that way – which is good. The Bank’s mandate remains essentially unchanged from the last renewal, and from renewals all the way back to 1995 when the two per cent inflation target was first implemented. Extending…
David O’Neill Losier – Let’s Give Credit Unions a Fighting Chance in the Digital Age
To: Banking System Observers From: David O’Neill Losier Date: December 7, 2021 Re: Let’s Give Credit Unions a Fighting Chance in the Digital Age Payments Canada recently declared that the “radical shift in purchasing behaviours since the onset of COVID-19 continues” as online payments surge. That is no surprise to any of us. The long-predicted digital revolution in financial […] The Bank of Canada’s inflation target: Stick with what works – Financial Post Op-Ed
Inflation has risen to almost five per cent and the year-end deadline for the federal government and the Bank of Canada to announce a new monetary policy framework is barely three weeks away. Should we be nervous?
Since 1991, the framework has been an inflation-control target, and since the end of 1995 that target has been two per cent. That system has been a striking success. The CPI’s average increase over the 25 years from 1995 until the onset of the pandemic was 1.9 per cent annually. Previous five-year renewals of the inflation-control agreement were quiet affairs with only minor tweaks.
Not so this time. COVID’s hit to productive capacity has combined with massive monetary and fiscal stimulus to push inflation well…
William B.P. Robson – The Lasting Harm of ‘Transitory’ Inflation
From: William B.P. Robson To: Canadian Inflation Watchers Date: December 6, 2021 Re: The Lasting Harm of ‘Transitory’ Inflation October’s consumer price index was up 4.7 percent from a year earlier. Numbers like these are bringing an end to talk of “transitory” inflation from many forecasters and central bankers. Not before time. Canadians dismayed by recent higher prices for […] Kronick, Laurin – Taxing Big Banks and Insurers – Unlikely to Go the Way Planned
From: Jeremy M. Kronick and Alexandre Laurin To: Finance Minister Chrystia Freeland Date: November 30, 2021 Re: Taxing Big Banks and Insurers – Unlikely to Go the Way Planned Most people understand and agree with the notion that taxation should be progressive – people who earn more should bear a greater burden of funding the services provided by government […] Two Sides of the Same Coin: Why Stablecoins and a Central Bank Digital Currency Have a Future Together
Canada Needs a Digital Dollar in the New Crypto World With Canada on the cusp of a new chapter in its monetary history as cryptocurrencies grow in popularity, the Bank of Canada should issue a central bank digital currency to facilitate the emergence of Canadian dollar stablecoins, according to a new report from the C.D. […] Jeremy Kronick on BNN – The Bank of Canada needs to adopt a digital currency
As cryptocurrencies grow in popularity, the C.D Howe Institute is calling on the Bank of Canada to issue a central bank digital currency in order to keep up with innovation in the payment space. Jeremy Kronick, Associate Director of Research, joins BNN Bloomberg for more details.
The “Demand Stabilization Mechanism”: Using Temporary GST Cuts as Automatic Fiscal Policy
Automatic GST Cuts Should Be In Ottawa’s Tool Box To Fight Downturns The federal government should consider automatic cuts to the goods and services tax (GST) in downturns as a complementary fiscal policy measure states the report. Authors Robin Boadway and Thorsten Koeppl propose an automatic mechanism that would use temporary cuts in the GST […] A Passport to Success: How Credit Unions Can Adapt to the Urgent Challenges They Face
Credit Unions Must Go Big on Digital, Scale up to Thrive Credit unions face urgent challenges in the digital revolution, including the need for large new investments in technology and room to expand, according to a new report from the C.D. Howe Institute. With the digital revolution underway, most credit unions outside of Quebec are […] Ambler, Kronick – The Bank of Canada’s Welcome Inflation Blink
From: Steve Ambler and Jeremy M. Kronick To: Inflation watchers Date: November 2, 2021 Re: The Bank of Canada’s Welcome Inflation Blink The Bank of Canada’s decision last week to leave its target for the overnight interest rate at 25 basis points and end its quantitative easing (QE) program was the right call given what now seems to be […] Il est minuit moins une, que fait votre argent? – La Presse Opinion
Que fait votre argent pour sauver la planète alors que s’ouvre la COP26, la conférence de la dernière chance pour limiter le réchauffement climatique?
Une bonne partie de votre épargne, celle qui assure(ra) votre chèque du Régime de rentes du Québec, est gérée par la Caisse de dépôt et placement, qui a récemment décidé de vendre ses dernières actions dans le pétrole, mais de conserver celles dans le gaz naturel et les pipelines.
La Caisse est l’une des 295 institutions financières de 40 pays qui, collectivement, gèrent des actifs supérieurs à 90 000 milliards de dollars américains, et qui se sont engagées à atteindre la carboneutralité de leur portefeuille d’ici 2050, à se fixer une cible intérimaire pour 2030, à…
Inflation and the Bank of Canada: the Bank blinks – Financial Post Op-Ed
On Wednesday, the Bank of Canada left its target for the overnight interest rate at 25 basis points and ended its quantitative easing (QE) program, which, through purchases of government bonds, had more than quadrupled its balance sheet. This was the right call given what now seems to be persistent underlying inflation.
From now on, the Bank will only purchase government bonds to replace ones that mature. Its balance sheet will stay high compared to its pre-pandemic level but, in theory, won’t grow further. Tightening monetary policy to deal with inflation above target can now come in only one of two forms: shrinking the balance sheet by selling or not replacing maturing government bonds or, more likely, hiking the overnight…