The Bank of Canada decided to hold on raising interest rates yesterday, but there were some very interesting things in the accompanying Monetary Policy Report that haven’t been widely reported on, and much of that was the whole section in the report on the state of the oil industry in Canada. (It’s pages 9 and 10 of the report – PDF here). Essentially, for all of the talk about economic doom for the current state of oil prices and the price differential, this current price shock is affecting the Canadian economy at a quarter of what it did in the 2014-2016 price shock, and there are a couple of reasons for that. One of them is that the oil sector is no longer as big of a part of the Canadian economy as it was then – it’s currently worth 3.5 percent of our GDP, while it was six percent just a few years ago. That’s fairly significant. As well, after the previous price shock, most energy firms are better equipped to handle the low-price environment thanks to innovation, improved efficiency and the fact that they already cut overhead costs. Add to that, our low dollar is providing a buffer effect because it supports non-energy exports and employment. In other words, while it’s softened the economy a little over the past quarter and the current one, this is projected to be shrugged off as the rest of the economy continues to pick up steam, and we’re likely to continue growing at a greater pace, because the rest of the economy continues to be running close to capacity. Even some of the areas of potential slack that have been identified, such as lower-than-expected wage growth, are mostly because the situation in Alberta is dragging down the national average. So perhaps it’s not all doom after all.

One other particular note from the morning was that Bank of Canada Governor Stephen Poloz made a couple of remarks around his hometown of Oshawa, and how it’s managed to weather previous plant closures and how its resilience means it will likely weather the pending closure of the GM plant as well as it did previously.

Meanwhile, Kevin Carmichael walks us through the morning’s decision, and some of the reaction to it.

Good reads:

• While in Kamloops, BC, Justin Trudeau touted the LNG project related to the pipeline being protested in BC, but later said they need to do better around rights and title.
• Trudeau did say he wasn’t happy with the police response to the barricades in that situation; a tentative agreement has been reached in that situation.
• Trudeau also called by-elections in three of four vacant ridings, including Burnaby South. The fourth won’t be called until the provincial by-election is over.
• The federal government is offering more financial aid to a Canadian steel company affected by the American tariffs.
• Transport Canada unveiled new regulations around drone usage, including mandatory licencing and registration.
• Facebook is removing comments from “Yellow Vest” pages that call for the prime minister to be killed. Should they also forward them to the RCMP?
• Canadian officials say they’re open to granting asylum to a Saudi woman currently in Bangkok after fleeing her abusive family.
• Here’s an explanation about the conflict between hereditary chiefs and elected band councils around the situation with the natural gas pipeline in BC.
• Here’s a lengthy look at how some First Nations have fresh water, but inadequate infrastructure and plumbing to get it into people’s homes.
• The Canadian Forces reported fifteen suicides over 2018, in spite of a new prevention policy.
• Elections Canada is launching consultations on how to deal with donations made by cryptocurrencies.
• Ethics committee chair Bob Zimmer hopes that Ottawa will host the “international grand committee” looking into data mining and privacy in May.
• The Liberals say they will pay the House of Commons $500 for using the prime minister’s office in a fundraising video, and return donations related to it.
• Liberal staffers had a sexual harassment prevention training session on Wednesday, but the trainer fears an election year could mean more silence around incidents.
• Thomas Mulcair, with what appears to be a mixture of bitterness and gall, suggests that Jagmeet Singh won’t be able to stay on as leader if he loses his by-eleciton.
• Here’s a look at the rise of provincial Green parties, and whether that may translate federally in the next election.
• Stephen Harper was on a panel in India, where he said a “smart” PM would find a way to work with Donald Trump. That’s giving Trump an awful lot of credit…
• A major money laundering investigation in BC was ended after Crown prosecutors accidentally revealed a police informant, and jeopardised his life. Oops.
• Susan Delacourt relays the rumours of a possible cabinet shuffle in the works.
• Andrew Coyne ponders the possible cynicism of Trudeau’s timing of the Burnaby South by-election.
• Colby Cosh delves into a study on the use of GoFundMe campaigns for medical quackery, and the question of what can be done about it.

Odds and ends:

Senators are debating whether or not to re-create the kitchen in their new building, which was the site of the constitutional “kitchen accord,” for historical reasons.

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