Following Poilievre’s attacks, Bank of Canada official says it’s ‘accountable’ for failure to check inflation

The Bank of Canada deputy governor acknowledged on Thursday the institution had failed to keep inflation at target and needed to “take responsibility.”

Paul Beaudry made the remarks in response to Conservative leadership candidate Pierre Poilievre’s claim last month that Bank of Canada governor Tiff Macklem had “granted his independence” to Prime Minister Justin Trudeau through through a program of “money printing” quantitative easing in response to the pandemic-fueled economic crisis.

During the party’s official English language debate in Edmonton, Poilievre also said he would fire Macklem if he became prime minister.

Beaudry was asked by reporters Thursday to respond to those remarks.

“The aspect where we have to be accountable is absolutely right,” Beaudry told a news conference.

He did not directly answer the question of whether Macklem’s work should be done. He said the Bank is not active in the political sphere and wants to keep the platform intact.

However, Beaudry acknowledges the impact of high inflation on many Canadians.

“We fully understand right now that a lot of Canadians may be frustrated by this situation,” he said. “It’s been tough for a lot of people. And we haven’t managed to keep inflation at our target level, so it’s appropriate that people are questioning us.”

The Bank’s objective is to keep inflation at 2%. The current it’s close to 7%.

And while Poilievre blamed the Bank’s decisions for inflation, Beaudry said the most significant effects on inflation were international – supply chain bottlenecks that arise when the economy Globally recovering from the pandemic, the war in Ukraine caused oil, wheat and fertilizer prices to soar.

Because Canada cannot control the prices of most internationally traded goods, dealing with these forces is difficult, Beaudry said.

Inflation has blown past forecasts: Beaudry

Beaudry said the Bank is trying to explain to Canadians the current situation – in what respects it is right and wrong. It also involves describing what the Bank is learning from this period, he said, and how it plans to control inflation going forward.

He pointed out some of the flaws in a speech to the Gatineau Chamber of Commerce in Gatineau, Que. on Thursday. He noted that inflation was not only above the Bank’s targets over the past year, but also far beyond the bank’s projections.

He promised that when the Bank updates its inflation forecasts in July, it will provide an initial analysis of the flaws in the inflation forecasts.

Inflation has raised the cost of essentials – including many groceries. (Ivanoh Demers / Radio-Canada)

Beaudry also predicts that inflation is likely to rise further in the short term before it begins to ease.

Speaking to reporters, Beaudry also explained some of the challenges the Bank faces in making decisions in a time of volatile global conditions.

While he acknowledged that the Bank had struggled to predict price increases for oil and food and was unaware of how supply chain issues could also lead to price changes, he said the Such errors are common among those trying to predict inflation.

“We think we’ve made the kind of decision that’s best for Canadians at each point in time given the information we have,” he said.

Beaudry said lowering inflation is the Bank’s main concern right now.

“We had to figure out how to bring everything down to 2%,” he said. “We’re up there.”

Poilievre’s comments about the Bank of Canada were met with fierce criticism. His critics have warned that threats against the Bank of Canada undermine trust in the institution and, by extension, the economy. In response, Poilievre claimed that he was just annoying the “elite.”

Leadership rival Jean Charest attacked Poilievre over his comments about the Bank during the party’s official English language debate in May, calling them “irresponsible”.

“It creates suspicion. If you’re an investor looking to go to Canada and you hear that kind of statement from a member of the House of Commons, you’d think you’re in a Third World country.” “, he said.

Conservative leadership candidate Jean Charest says firing the Governor of the Bank of Canada would be ‘irresponsible’

Jean Charest says Pierre Poilievre’s claim that the Governor of the Bank of Canada is responsible for the inflation rate and then fired is an “irresponsible” statement to a candidate vying for power. leader of the Conservative Party.

“We can’t have any leader going out there and deliberately eroding trust in institutions. Conservatives don’t do that.”

Ed Fast, a Charest supporter, also attacked Poilievre’s statements about the Bank. He quickly resigned as Conservative financial critic shortly after making those remarks, and claimed Poilievre’s supporters had tried to “silence” him on important issues.

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