Roundup: A rate hold and inappropriate reactions

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The big news of the day was that the Bank of Canada opted to maintain their headline rate at five percent, but warned that future rate hikes are still possible, depending on how the data look with future decision dates. This was a decision based entirely on the data—and the very mild contraction in the second quarter are certainly pointing to the fact that the economy is finally starting to slow so that maybe it can start to take the air out of excess demand. Nevertheless, I’m still expecting those three premiers who sent open letters to do a victory lap as though they had any say in the matter.

The bigger problem was Chrystia Freeland putting out an official statement saying that she was pleased with the decision, and while she respects the Bank’s independence, the government will use all of its tools to help bring inflation down (though one is a bit more dubious about that part). Why Freeland’s statement is a bigger problem is because she has a much bigger stick to wield with the Bank, and she has the tools that could force the governor to resign, which we haven’t seen since the Coyne Affair in the fifties, which led to the Bank shoring up its institutional independence. Freeland should know better, but I suspect that with all of the attention being paid to those premiers and their boneheaded open letters that she felt she needed to say something, and to offer some kind of reassurance to the public about the slowly improving state—because this government loves nothing more than reassuring pabulum. To compound that, every gods damned talking head over the past few days has been saying how great it was that the premiers were grandstanding like they way they are, because messaging politics just corrodes and rots our system.

Meanwhile, Jagmeet Singh decided he wasn’t getting enough attention, so he decided to embarrass himself and insist that the federal government can order the Bank to stop raising rates, because he thinks that interfering with an independent institution and forcing the resignation of the governor (which would be the outcome of such a move) are somehow winners for the economy. Singh would also apparently rather see inflation continuing to rip through our economy rather than the short-term pain in wresting it back down, because that is the counterfactual here. His “greedflation” insistence doesn’t bear out in the data, and a windfall tax won’t solve inflation. His suggestion here is beyond amateur hour, and shows that he remains unprepared for prime time.

Ukraine Dispatch:

Russians attacked a market in the eastern city of Kostiantynika yesterday, killing at least 17 people. The UN High Commissioner for Human Rights has recorded 26,717 civilian casualties in Ukraine so far, including 9,511 deaths. US Secretary of State Antony Blinken visited Kyiv, and praised the progress in the counteroffensive to date.

https://twitter.com/zelenskyyua/status/1699405764983415077

Good reads:

  • Justin Trudeau has been meeting with ASEAN leaders at the summit in Jakarta, in the hopes of Canada joining the trading bloc. He heads to Singapore today.
  • The government has awarded a $15 million contract to Sun Life to lay the groundwork for their dental care programme (to meet the NDP’s deadline).
  • The government signed a contract to store a ship to a company that is owned by the one as the yard they are suing for allowing the ship to be damaged.
  • The Canadian Armed Forces Ombudsman says that they aren’t doing proper mental health assessments ahead of domestic deployments, particularly for reservists.
  • Unsurprisingly, the CPTPP trade dispute resolution panel found that Canada isn’t living up to its obligations around dairy access for New Zealand.
  • There are calls for the federal government to start leveraging its federal disaster relief dollars into ensuring it goes to climate-resilient infrastructure.
  • The UN’s special rapporteur for contemporary forms of slavery has denounced Canada’s temporary foreign worker programme as a gateway to modern slavery.
  • Ahead of his party policy convention, Pierre Poilievre reminds us that he’s not bound by any of what gets voted on (which is a problem with party politics).
  • To kick off his party’s caucus retreat, Jagmeet Singh put a focus on Poilievre, and insisted he’s going to get housing concession from the government.
  • The evacuation order has been lifted for Yellowknife, and people are now heading back home to the Territory.
  • Colin Horgan wonders if the Bank of Canada’s reputation has been too damaged by the bout of inflation, and the opportunism of populist politicians.
  • Justin Ling explains how far-right players and actual Neo-Nazis have been roping in Elon Musk to help keep Twitter a safe space for them and their radicalization.

Odds and ends:

For Xtra, I sat down with the head of Transgender Europe (and former head of Kyiv Pride) to talk about the situation of LGBTQ+ Ukrainians and what Canada can do.

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