It was a big day for economic news – the Bank of Canada stating that they expect interest rates to continue to be at near-zero until 2023, as the economic recovery moves into a much slower phase as we wait for a vaccine for the pandemic. They also stated their plan to change how they buy bonds going forward. A few hours later, Chrystia Freeland gave a major speech wherein she stated that the government was going to keep spending until the pandemic was over, because they can at a time of such historically low interest rates, and because it provides businesses and households a necessary bridge through the economic turmoil until the pandemic is over. And for those of you in the back, it’s not 1995, and even with all of this added spending – which is time-limited – is not going to create a debt bomb. It’s just not.

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She also noted that debt payments as a share of #cdnecon is the smallest in a century. This is also true! One has to go back to the WW1 period to see lower shares. Here's all the data since 1867. (Note: 2020 is a forecast.) pic.twitter.com/YjTiYDRrBM

— Trevor Tombe (@trevortombe) October 28, 2020

Of course, conservative pundits set about clutching their pearls that the government is taking on the debt instead of households, apparently not comprehending that they have more tools and levers at their disposal than households – but these are the same chuckleheads who equate government debt with credit card debt. The Bank of Canada’s Monetary Policy Report noted that much of the recovery to date has been on the back of consumer spending, which is one more reason why allowing households to go insolvent and enforcing consumer austerity would only harm the economic recovery – we saw this in the Great Depression, where consumers who had money but didn’t spend it because of the social stigma prolonged the depression for years. And yet, we keep hearing “taxpayer dollars!” and “leaving debt to our children,” as though leaving them a weak economy is any better – particularly if that debt is affordable and is treated as an investment with programmes like childcare, that creates more economic returns. This should not be a difficult concept to grasp – and yet…

Meanwhile, here is Kevin Carmichael’s parsing of the Bank of Canada’s rate decision and Monetary Policy Report, while Heather Scoffield gives her own thoughts on Freeland’s speech.

Good reads:

• Dr. Theresa Tam delivered a report on the state of the pandemic, saying it exposed structural problems in the country that need to be solved going forward.
• The conversion therapy ban bill passed second reading and heads to committee, and seven Conservatives voted against it. (I suspect more to come at third reading).
• The Canadian Forces have unveiled an updated plan to combat sexual misconduct in the ranks, as the five-year-old previous plan has been slow to change the culture.
• Families of the victims of Flight PS752 have been receiving death threats for speaking out against the Iranian regime.
• The filibuster at the finance committee over the production of unredacted WE documents continues, as the Liberals try to introduce amendments to the order.
• Here is some background on the Bloc’s demand for an official apology for the invocation of the War Measures Actduring the October Crisis in 1970.
• Quebec says they are suspending private refugee sponsorship by groups for a year, while they investigate allegations around the programme’s integrity.
• Susan Delacourt looks into the latest Samara Canada report, which purports that trust in government has increased since the pandemic, and populism is declining.

Odds and ends:

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