Tag Archives: Bank of Canada

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

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Roundup: Open Letters to Tiff Macklem

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BC premier David Eby decided he needed to be extra performative yesterday, and wrote an open letter to Bank of Canada Governor Tiff Macklem, urging him not to raise interest rates next month because of the “human cost” of these interest rate hikes—ignoring of course the counterfactual of the effects of unchecked high inflation and the “human cost” that it has over the short and medium term.

What is pretty galling in all of this is that Eby knows better. He was once a pretty good civil liberties lawyer, and he fully knows that the Bank is independent, and that they have a legal mandate that they need to fulfil when it comes to keeping inflation at two percent, and that their main policy tool is the blunt instrument of interest rates. His “I know the Bank is independent but…” spiel was frankly embarrassing, and should not have merited the attention it got from the media, but here we are.

Speaking of, Power & Politics was not only true to form in giving him a soapbox to make his point, and rather than doing their jobs of pointing to the irresponsibility of this kind of move, particularly at a time when you also have Pierre Poilievre warning that he’s going to fire the Governor (with what power?) and threatening the Bank’s independence. It would be great if CBC could do a single economics story properly and not just treat it like an issue to be both-sidesed, but they apparently have zero willingness to do so, and the fact that this Eby interview was that ignorant is a sign that they cannot be bothered to care about economics stories for anything than just trying to plug them into their established narratives, and it’s doing the country an extreme disservice.

Programming Note: I’m taking the full long weekend off, so I’ll see you early next week.

Ukraine Dispatch:

Ukrainian forces have reported some success in the south and east, but I am also tickled by their latest video offering, telling all of those armchair generals to basically shut up because they’ve been doing the heavy lifting on their own. President Volodymyr Zelenskyy says that Ukraine has developed its own long-range weapons that can strike 700 kilometres away, which may have been a sly nod to the attack on Russian airbases that destroyed a number of fighters. The mayor of Kyiv wants to build more fortifications, because there always remains the threat from Russia.

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Roundup: Toronto’s asylum-seeker problem

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There is a bit of an issue happening right now around asylum seekers in Toronto and other parts of the GTA unable to find shelter spaces and some of them sleeping on the streets, and everyone wants to blame the federal government, because of course they do. Reality is, of course, far more complicated and you’d better believe that there is plenty of blame to go around.

To start: the federal government is responsible for refugees, meaning those who have had a status determination, most of whom came over with sponsorship and under some formal programme or structure, and that usually comes with supports, either provided by government or communities. What is the bigger problem in Toronto are those asylum seekers who don’t have a status determination, and may have entered the country in an irregular manner, and because they don’t have status, they also can’t get work permits until they do. And this largely is the responsibility of provinces and municipalities until they get that status determination. But this isn’t to say that the federal government isn’t helping with this situation, because they are, operating certain resettlement services including hotels for some claimants, and they have sent hundreds of millions of dollars to help provinces and municipalities most affected offset their costs. But of course, this money it’s not enough, in part because there are bigger challenges that cities like Toronto haven’t overcome.

In a very real sense, this is a culmination of how broken things have become, particularly under decades of austerity measures by conservative governments and city councils. Provinces are under-funding social services and affordable housing, driving more people to shelters, while the city resists building housing in order to please NIMBY residents clutching their pearls about their property values, so that keeps people in shelters who shouldn’t be there, including these asylum claimants. And because both Toronto and the Ford government have decided the solution to these deep-seated problems is to simply demand more money from Ottawa rather than accepting responsibility for their share of the problem and, oh, doing something about it, it’s leaving the federal government in the position of trying to push back and say things like they need all levels of government to work together, which is also true. I suspect we’ll see some additional federal funds in the next few days as yet another stopgap measure, but this shouldn’t let cities or the province off the hook, as they need to properly step up and start fixing the underlying problems that have led them to this point.

Ukraine Dispatch:

Russian launched an overnight drone attack against president Volodymyr Zelenskyy’s hometown of Kryvyi Rih, and sixteen of the seventeen were shot down, but the last drone and falling debris caused damaged and injured one woman. Progress in the counter-offensive remains slow as Zelenskyy says that the Russians are throwing everything they have at it. Here is a profile of Kyrylo Budanov, Russia’s spy chief. Meanwhile, it sounds like Zelenskyy’s pressure tactics at the NATO summit riled people in the White House, and there was much fighting over the language of the communiqué around Ukraine’s eventual membership in NATO.

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Roundup: Misguided “free-rider” complaints

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The Wall Street Journal had an unsigned editorial board op-ed yesterday that denounced Canada as a “military free rider,” but then did little to actually back up their assertions, omitted a bunch of facts, and went on a tear about the current government’s mission to fix the toxic culture within our armed forces, citing “See how that cultural manifesto works on the Ukrainian front lines.” Um, considering that our soldiers are successfully training the Ukrainians into a fighting force that is nimble and not just throwing bodies at the enemy like the old Soviet system did, it’s working fairly well? And how is Russia’s toxic masculinity doing on the battlefield anyway? Oh, right. In a similar vein, the editorial rages that we don’t spend enough on defence while we “shovel money into public unions and social-welfare programmes.” Like our health care system, which even in its current broken state is still far superior to the Americans? I mean, really?

To add to Steve Saideman’s comments, where the paper seems to fall into that same basic trap of not understanding how NATO works, which is that it requires participation from countries, and we participate. We may not spend to the same percentage, but several high-spending countries don’t actually participate, and because the two percent target is a really stupid metric, it ignores that the denominator is far higher in Canada than in a lot of these higher-percentage countries. Could our spending be better? Yes. Is our procurement system completely screwed? Yes. Have we been something of a free-rider in continental defence because we know the Americans will be there regardless? That’s fair. But trying to assert that it’s because we’re too “woke” is just puerile.

Oh, and about their seeming to prefer Poland, who is sliding into illiberalism and who has a major problem with homophobia, there was this gem on the wire yesterday about how that government broke EU law by suspending a judge who for criticising the government. Yeah, that’s totally who should be replacing Canada at the G7 and in a leadership position in NATO. Well done, WSJ. Slow clap.

Ukraine Dispatch:

At least 20 Iranian-made drones attacked mostly the Kyiv regions early Thursday, with debris wounding two people. American intelligence suggests that Wagner mercenary forces are no longer participating militarily in Ukraine in any significant capacity. Russia appears to be detaining thousands of Ukrainian civilians without charges, and appear to be planning to create even more prison colonies.

https://twitter.com/ukraine_world/status/1679477329804902401

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Roundup: Another rate hike, more nonsense talking points in response

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Not unexpectedly, the Bank of Canada raised interest rates another quarter point yesterday because inflation is becoming sticky, particularly in the core measures that they use to strip out the highly volatile measures like gasoline prices. If you read through the Monetary Policy Report, which shows the state of the global and Canadian economies, economic growth in Canada remains stronger than expected—too strong to tame inflation—and there is still too much demand in the system, particularly for services as opposed to goods, which is keeping those prices higher, as they are especially sensitive to the tight labour market. To that end, the Bank is now expecting inflation to last around three percent for most of the next year before finally getting back to the target of two percent, which is later than they anticipated because economic growth is still too strong.

Meanwhile, Pierre Poilievre continues to spout absolute nonsense about the causes of this inflation—it’s not government spending, and that isn’t indicated in the MPR anywhere—and lo, media outlets like the CBC simply both-sides his talking points rather than dismantling them. He’s talking about how he’s going to cut taxes, which would actually fuel inflation rather than do anything to tame it (and no, carbon prices are only marginally inflationary and cutting them would do nothing to slow it). And then there’s the NDP, who think that the Bank should lay off and instead use windfall taxes, as though “greed-flation” is what’s driving inflation (again, not indicated anywhere in the MPR). But as economist Stephen Gordon has pointed out, this kind of promise of painless measures to fight inflation are the provenance of quacks and faith healers. It won’t help, and it will make things worse.

Ukraine Dispatch:

It was a third consecutive night of Russian drone attacks directed to Kyiv, and falling debris has killed one person. Elsewhere, Ukrainian troops are reporting “some success” around Bakhmut.

https://twitter.com/kyivindependent/status/1679340673357557761

https://twitter.com/davidakin/status/1679031785764659201

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Roundup: The “filibuster” that wasn’t

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A particular level of self-aggrandisement seems to be taking hold in the Leader of His Majesty’s Loyal Opposition, as he describes things that are not reflective of reality. Yesterday morning, he summoned the media to a speech he delivered to caucus—something that is not uncommon for the last caucus meeting before the summer break, but we are still two weeks away from that. There, he promised that he was going to rise in the House of Commons at 7 PM and begin a filibuster of the budget bill, and that he wouldn’t stop until the government backed down and acceded to his demands.

Except it was all bullshit.

There wasn’t going to be a filibuster. The House had already passed a programming motion, thanks to the NDP, that laid out just how many hours left of debate there were before the final debate, and Poilievre couldn’t just talk and talk past he expiry of that clock. It was already set in stone. So, after another attempted abuse of remote voting as a procedural tactic (which the Deputy Speaker lost all patience with), Poilievre got up to give his five hours of allotted time. But again, this isn’t actually a filibuster because the leader of the opposition gets unlimited speaking time to certain items on the Order Paper, and this was one of them. He wasn’t filibustering anything. He was showboating.

While Conservatives flooded social media with effusive praise about how he was standing up for defenceless Canadians against the predations of the government, and they kept praising how long he was speaking, he wasn’t actually accomplishing anything other than playing to his own backbenches. It’s not like anyone other than a few shut-ins and reporters who drew the short straw were watching. He didn’t stop the budget bill, because it was already the subject of a programming motion. He just talked for the sake of it, and was even finished before midnight hit, when the time would have expired automatically. There was nothing heroic about this action, and it accomplished exactly nothing at all.

https://twitter.com/a_picazo/status/1666653154694266880

Ukraine Dispatch:

President Volodymyr Zelenskyy is calling for international assistance in dealing with the destruction of the Kakhovka dam, as they continue to evacuate people from floods, and local authorities rush things like drinking water to the affected area. Meanwhile, Ukrainian forces have gained more ground around Bakhmut, but insist that this is not part of any ongoing spring offensive.

https://twitter.com/defenceu/status/1666417873776959489

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Roundup: The campaign leaders testify

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Yesterday was the big day when top campaign officials from the Liberals and Conservatives appeared at the Procedure and House Affairs committee to talk about foreign interference allegations in the previous two elections, and we learned a couple of things. One of which is that Fred DeLorey, the Conservative campaign director, is eminently reasonable and acknowledges they don’t know if there was any actual interference in those ridings they lost, or if it was the result of other factors, like their hard-line rhetoric on China, or gun-control measures (as the Liberal campaign insists). Another thing we learned is that the reporting on the CSIS “warnings” about MP Han Dong were not described accurately, and that they didn’t insist the party drop him as a candidate—which never did make sense if you listened to the actual intelligence experts who said at the time that that didn’t sound right.

There was also talk about how it takes an incredibly high threshold for a party to be able to drop a candidate, so if intelligence agencies had concerns, they would need to come up with something pretty tangible for the parties to exercise that kind of power (and don’t forget that their spending caps are determined by how many candidates they’re running, so if they need to drop one after the cut-off point to replace a name on the ballot, that creates even more headaches). There was also talk about how there needs to be more ongoing dialogue between national security agencies and parties, particularly between election cycles, because these agencies didn’t seem to understand how parties operated, which makes it hard for them to be making determinations about how any interference might be happening (and again, considering that the reported leaks had a bunch of details that didn’t make any sense, this could be the reason why).

Suffice to say, these were the people who should have been testifying the whole time rather than the dog and pony show we had with Katie Telford, which was just a waste of time and resources.

Ukraine Dispatch:

A Russian missile struck a museum in Kupiansk, in the Kharkiv region, killing one civilian and wounding ten others. As well, a woman died from shelling in nearby Dvorichna, and two others in the eastern Donetsk region. Elsewhere, Ukrainian forces staged raids on the east side of the Dnipro river in order to degrade Russian capacity, particularly in their shelling of Kherson, in a sign that the counter-offensive is near. Ukraine is planning on a “complete transformation” of six war-torn cities that were badly damaged in the invasion, to be rebuilt under an experimental programme according to “new principles.”

https://twitter.com/zelenskyyua/status/1650769182286331905

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Roundup: Poilievre’s fictions about crime

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Pierre Poilievre held a press event in Edmonton yesterday, and it was…quite something. From the bullying of the Canadian Press reporter, the doublespeak and particularly notable omissions in his “defund the CBC” shtick, the economic illiteracy, the complete fiction he was peddling about violent crime, it was just another sign of how things are degenerating in our political discourse. The name of the game is flooding the zone with bullshit, and being an odious troll. Much of his base knows that he’s lying and they love it because he gets away with it, sticking it in the faces of people who care about things like facts or the truth (while the ignorant portion of said base laps up everything he says uncritically, which he also likes because they’re easily manipulable). It’s corrosive to political norms that we rely on, and he doesn’t care. This can’t end well, and I worry things are going to get worse.

https://twitter.com/EmmMacfarlane/status/1646585470866915354

Ukraine Dispatch:

Russian forces have been shelling Bakhmut unrelentingly, and have also fired on the southern city of Kherson. Here’s a look at LGBTQ+ soldiers fighting in Ukraine, and the added challenges they face while doing their part to defend their country.

https://twitter.com/ukraine_world/status/1646534358415671302

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Roundup: Governance troubles at the Trudeau Foundation

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It sounds like things may have been worse off at the Pierre Elliott Trudeau Foundation than was initially believed as the CEO and board resigned. According to La Presse, there may have been bigger governance issues as they discovered that their attempt to return the $140,000 donation from that Chinese businessman (which wasn’t the $200,000 initially promised/reported) was met with revelations that names and businesses didn’t match up and there was nobody there to return the money to. That points to a lack of due diligence within the organisation, and in light of that, they have called in an outside investigator. None of this excuses the myriad of conspiracy theories that have been built up around Foundation, nor is the prime minister implicated in any of this as it all happened after he left the organisation, but it’s not a good look for them.

And because he continues to want to be a shitposting edgelord rather than a serious politician, Pierre Poilievre sent a juvenile letter to David Johnston yesterday, reflective of the seriousness of the situation of foreign interference allegations. Our democracy is in trouble.

Ukraine Dispatch:

Ukrainian forces continue to rebut the Russian Wagner Group claims that they have all-but entirely captured Bakhmut. Ukrainian officials have launched an investigation into a video that purports to show Russians beheading a Ukrainian soldier in a war crime.

https://twitter.com/ukraine_world/status/1646183682833629184

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Roundup: No actionable intelligence?

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The Globe and Mail advanced the allegations surrounding MP Han Dong last night, apparently having received the same intelligence that Global did, and asked the PMO about it two-and-a-half weeks ago. Their sources say that PMO asked for a transcript of the conversation Dong allegedly had with the Chinese consulate, and deemed there to not be enough actionable in there. It does raise further questions about the leakers, and if they are leaking to both Global and the Globe and Mail, or if their sources remain separate.

Nevertheless, both outlets’ reporting lacks crucial nuance or expert checking with former intelligence officials that can provide both context or a gut check. And the fact that a transcript was provided doesn’t entirely tell us if this conversation was in English or Mandarin, and if it was in translation that could lose context or proper nuance in the language, which are all important around how we are to evaluate the allegations. And irresponsible reporting is taking us into witch-hunt territory, which is going to get ugly really fast.

https://twitter.com/chercywong/status/1638869879351808000

Meanwhile, the House of Commons voted for a motion to launch a public inquiry immediately, but it’s non-binding, and the government is waiting on recommendations from David Johnston. It was noted that Dong voted for the motion, while Liberal MP Nathaniel Erskine-Smith abstained, later explaining over Twitter that he supports an inquiry but wants to wait for Johnston’s recommendations.

Ukraine Dispatch:

Ukrainian forces are gearing up for their spring counter-offensive as Russian forces are flagging in their assault on Bakhmut, but president Volodymyr Zelenskyy is warning European allies that unless they step up weapons shipments, the war could drag on for years. Zelenskyy visited the region around Kherson, and vowed to repair the damaged Russia had caused. Here are stories of Ukrainian fighters wounded in the fighting in Bakhmut, as they repelled Russian attacks. Seventeen children previously deported to Russia have been returned to Ukraine.

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