With inflation surging to multidecade highs, monetary policy has become a major topic of political debate for the first time in a generation
for the first time in a generation. Conservative Party Leader Pierre Poilievre has been a fierce critic of the central bank, and built much of his leadership campaign earlier this year around the topic of inflation. Now, with the central bank’s
Until recently, most critiques of the central bank have come from the Conservatives, who argue the bank’s government-bond-buying program during the pandemic was a key driver of inflation. Mr. Poilievre has championed this position, calling the bank an “ATM machine” for the government and saying he would sack Mr. Macklem if the Conservatives form government.
Mr. Macklem has said repeatedly in recent months that the Canadian economy is overheating, with demand for goods and services outstripping supply, and that the labour market will need to weaken before inflation can be brought back to the bank’s 2-per-cent target. In September, annual consumer price inflation was 6.9 per cent.
“It’s reasonable for folks in the policy space to debate central bank policy, but I have a lot of concerns with elected officials and political decision makers suggesting a particular path to the bank a couple days before the overnight interest rate decision,” Prof. Gillezeau said. “Sound money and credible fiscal policy will be rewarded. But mistakes will be punished and no one’s really going to be exempt,” he said.