C.D. Howe Institute Monetary Policy Council Calls for Bank of Canada to Raise Overnight Rate to 4.00 Percent and Accelerate Reduction in Bond Holdings
December 1, 2022 – The C.D. Howe Institute’s Monetary Policy Council (MPC) recommends that the Bank of Canada raise its target for the overnight rate, its benchmark policy interest rate, by 25 basis points to 4.00 on December 7, and sell some of its holdings of Government of Canada bonds. The Council also recommended that the Bank raise the overnight rate target to 4.25 percent in January 2023, and hold it there through 2023.
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 CEO, chairs the Council.
Council members make recommendations for the Bank of Canada’s upcoming interest-rate announcement,…
Softening the Bite: The Impact of Benefit Clawbacks on Low-Income Families and How to Reduce It
As families earn more taxable income, government benefit entitlements are reduced (or “clawed back”) at various phase-out rates, which reduces their overall cost for governments and ensures that they remain targeted to the intended lower-income families. However, benefit reductions act like hidden tax rates: They reduce the effective gain from working to generate additional […] Drummond, Sinclair – Information – the Key to Solving Health’s Problems
From: Don Drummond and Duncan Sinclair To: Canada’s Ministers of Health Date: November 30, 2022 Re: Information – the Key to Solving Health’s Problems The media is full of alarums about the problems of Canada’s so-called health “system” – crowded emergency rooms, increasingly inaccessible primary care, long wait times for nearly everything, “burned out” doctors and nurses, corridor medicine, […] Ottawa Should Soften Bite of Benefit Clawbacks for Low-income Families
Canada’s tax system has a punitive impact on lower income families with children hoping to earn more money, according to a new report from the C.D. Howe Institute. In “Softening the Bite: The Impact of Benefit Clawbacks on Low-Income Families and How to Reduce It,”…Benjamin Dachis – Municipal Inaction Forces Doug Ford into the Villain’s Role
To: Ontario Housing Watchers From: Benjamin Dachis Date: November 29, 2022 Re: Municipal Inaction Forces Doug Ford into the Villain’s Role Ontario’s controversial More Homes Built Faster Act allows the province to rewrite municipal plans, with the aim of allowing more land for development and more such initiatives are afoot. Premier Doug Ford has been accused of trampling upon democracy […] Reshoring is a poor long-term strategy for sustainable growth – The Hub Op-Ed
On November 22, 2022, as part of the Ontario Chamber of Commerce’s Ontario Economic Summit, The Hub’s executive director Rudyard Griffiths moderated a “Munk-style” debate involving Globe and Mail columnist Andrew Coyne, C.D. Howe Institute CEO Bill Robson, former Ontario Cabinet minister Sandra Pupatello, and The Hub’s own editor-at-large Sean Speer. The debate’s resolution read: Be It Resolved: Ontario Needs Reshoring as Part of Its Growth Agenda. Pupatello and Speer argued in favour of the motion. Coyne and Robson against it.
Thanks to the organizers for inviting us here to debate this very important question. Our worthy opponents, Sandra and Sean, make a very valiant case in favour of reshoring as part of Ontario’s growth…
Jon Johnson – US Inflation Reduction Act – Canada Relieved While Japan, EU, Korea and UK Concerned
From: Jon Johnson To: Canadian Trade Watchers Date: November 28, 2022 Re: US Inflation Reduction Act – Canada Relieved While Japan, EU, Korea and UK Concerned The Canadian auto industry breathed a collective sigh of relief when the Biden administration successfully enacted the Inflation Reduction Act of 2022, rather than the openly discriminatory Build Back […]Where’s the oil boom? Why Alberta’s recent good fortune is mostly a mirage – Globe and Mail Op-Ed
Alberta has earned a reputation over many decades for being a boom-bust economy. Strong oil demand and high prices have created boom times for jobs, incomes, investment and government revenues, while weak demand and falling prices have meant a slowdown or even recession on occasion.
But now, global demand for oil is again rising and prices are high, yet more oil-production revenue is not translating into a sustained economic boom for Alberta.
The province’s economy grew by 4.8 per cent in real terms (with inflation removed) in 2021. A budget surplus has financed or paid for Premier Danielle Smith’s latest inflation-relief handouts. While that sounds good, there was no oil boom; this growth is simply part of…
Laurin, Robson – Let’s Stop the Added Inflation Pain from Creeping Taxes
From: Alexandre Laurin and William B.P. Robson To: Canada’s Tax Collectors Date: November 24, 2022 Re: Let’s Stop the Added Inflation Pain from Creeping Taxes On the same day last week, we learned the consumer price index was up 6.9 percent year over year in October, and how much the federal government’s inflation-indexed tax may raise the price of […] The problem of the Bank of Canada’s ballooning balance sheet – Financial Post Op-Ed
The Bank of Canada’s ballooning balance sheet has received lots of attention lately. From $120 billion in early March 2020 it grew over the next 12 months to $575 billion and it still stands at $414 billion today, more than three times what it was. That happened because in response to the pandemic the Bank purchased Government of Canada bonds from commercial banks. It added the bonds to the asset side of its balance sheet and paid for them by boosting “settlement balances” — basically, the commercial banks’ bank accounts with it — on the liability side. Voilà, a ballooned balance sheet.
Three factors suggest the Bank’s larger balance sheet may be with us for a while.
First, although in response to…
What’s Happening with the Bank of Canada’s Balance Sheet?
When the Bank of Canada buys Government of Canada bonds from commercial banks, it adds them to the asset side of its balance sheet and pays for them by adding to the banks’ deposits (settlement balances) on the liability side of its balance sheet. As a result, the Bank’s balance sheet gets bigger. Amid rising […]