.JohnWilliamson_: The case for firing the governor of the Bank of Canada cdnpoli (unlocked)
Bank of Canada Governor Tiff Macklem has not acted independently and replacing him would strengthen the bank’s core mandate, writes John Williamson.The story link will be added automatically.OTTAWA—Canadians should expect two things from their central bank: independence and single-mindedness. And if the governor of the Bank of Canada can’t deliver on these two essential components of the job, then he or she should be replaced by someone who can.
Given that Macklem has been at the helm of the central bank throughout this recent run-up in inflation, is it reasonable to hold him to account for this failure? We must certainly acknowledge several external factors beyond his control, such as the global pandemic, massive supply-chain shocks, and a war in Ukraine. To determine how well Macklem has personally performed under these circumstances, we need to return to our two key indicators: independence and single-mindedness.
Fast-forward to 2022. Today, Canada is once again in the hands of a government that clearly does not care about inflation. The Trudeau government has delivered the biggest deficits this country has ever seen. The federal debt recently hit $1.1-trillion and is growing at the rate of $144-million per day. With the economy now coming back on track, continued public spending on this scale creates huge inflationary pressures.
As for single-mindedness, it appears the current governor worries about a lot more than just inflation. During his short tenure, the Bank of Canada has spoken out on everything from climate change to Indigenous reconciliation to social justice. He also signed a new Monetary Policy Framework with Ottawa that commits the central bank to supporting “maximum sustainable employment.”
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