Conservative leadership hopeful Pierre Poilievre also repeatedly claimed that the central bank printed money to finance federal spending and therefore caused inflation. However, the Bank of Canada and economists say that’s not what happened.
OTTAWA - As the Bank of Canada tries to reign in red hot inflation, the central bank is engaging in another fight: one against misinformation.
While central bank officials normally hold speeches and other events to communicate their thinking and to set expectations, Laval University economics professor Stephen Gordon says its audience has traditionally been smaller than it is today. Conservative leadership front-runner Pierre Poilievre has been a loud critic of the Bank of Canada, vowing to fire Governor Tiff Macklem if he becomes prime minister. Poilievre has not explained how he plans to fire Macklem given the Bank of Canada Act does not provide the federal government with that power.
“We bought existing gov’t bonds from banks on the open market. Why? This helped unblock frozen markets at the start of the pandemic. It let households, companies and governments access funding when they really needed it,” one of the tweets said.Sometimes referred to as QE, quantitative easing is a relatively new tool used to keep money flowing when interest rates are already hovering around zero and can’t be cut further. It garnered worldwide attention when it was used by the U.S.
The Bank of Canada began the process of quantitative tightening, where it sells these bonds back to financial institutions, in April of this year. A recent Angus Reid survey found 46 per cent of Canadians trust the Bank of Canada to fulfil its mandate, while 41 per cent said they don’t. The survey found distrust was higher among people who had voted for the Conservatives or the Peoples Party of Canada.
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