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

The deputy governor of the Bank of Canada acknowledged Thursday the institution has been unable to keep inflation at its target rate and should be "held accountable."

Paul Beaudry made the remarks in response to Conservative leadership candidate Pierre Poilievre's claimlast month that Bank of Canada governor Tiff Macklemwas "surrendering his independence" to Prime Minister Justin Trudeau through a "money-printing"quantitative easing program in response to the pandemic-driveneconomic crisis.

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

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

"The aspect that we should be held accountable is exactly right,"Beaudry told a news conference.

He did not engage directly with the question of whether Macklem's job ought to be on the line. He said the Bank is not in the business of politics and prefers to remain in the background.

Beaudry did, however,acknowledge the impact high inflation is having on many Canadians.

"Right now we completely understand that lots of Canadians can be frustrated at the situation," he said."It's difficult for a lot of people. And we haven't managed to keep inflation at our target, so it's appropriate people are asking us questions."

The Bank's goal is to keep inflation at 2 per cent. Currently it's closer to 7 per cent.

And while Poilievre has blamedthe Bank's decisions forinflation,Beaudrysaidthe most significant influenceson inflation are international supply chain bottlenecks emerging as the global economy recovers from the pandemic, the war in Ukraine driving up prices for oil, wheat and fertilizer.

Because Canada can't control the prices of most internationally traded goods, dealing with these forces is tricky, Beaudry said.

Inflation has been blowing past projections:Beaudry

Beaudry said the Bank is trying toexplain to Canadians how it got into the current situation which aspects it got right and got wrong. He said that also involves describingwhat the Bank is learning from this period and how it plans to control inflation going forward.

He laid out some of those errors in a speech to the Gatineau Chamber of Commerce in Gatineau, Que. on Thursday. He noted thatinflation hasn't just beenhigher than the Bank's targets over the past year it hasconsistently exceeded itspredictions.

He promised that when the Bank updates inflation projections in July, it will provide an initial analysis of the inflation forecast errors.

Beaudry also predicted that inflation is likely to riseeven higher in the short term before it beginsto ease.

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

While he acknowledged the Bank struggled to predict price increases for oil and food and didn't perceive how supply chain issues could also lead to price changes, he said such errors are commonplace amongthose trying to anticipate inflation.

"We think we've taken the best type of decisions for Canadians at each point for the information we had," he said.

Beaudry said bringing inflation down is the Bank's main concern right now.

"We have to figure out ways of bringing things back down to that two per cent," he said. "We're on it."

Poilievre's comments about the Bank of Canada have come under fire. His critics have warned that threats directed at the Bank of Canada undermine trust in the institution and, by extension, the economy. In response, Poilievrehas claimed that he's just rattling"the elites."

Leadership rival Jean Charest attacked Poilievreoverhis comments about the Bank during the party's official English language debate in May, calling them "irresponsible."

"It creates doubt. If you're an investor looking at coming to Canada and you hear that kind of a statement coming from a member of the House of Commons, you'd think you were in a Third World country," he said.

Conservative Party leadership candidate Jean Charest says firing Bank of Canada Governor would be 'irresponsible'

2 years ago

Duration 0:51

Jean Charest says Pierre Poilievre's claims that the Bank of Canada Governor should be held responsible for inflation rates and subsequently fired is an "irresponsible" claim for a candidate vying for leadership of the Conservative Party to make.

"We cannot afford to have any leader that goes out there and deliberately undermines the confidence in institutions. Conservatives do not do that."

Ed Fast, a Charest supporter,also attacked Poilievre's statements on the Bank. Fast resigned as Conservative finance criticsoon after making thoseremarks, claiming Poilievre supporters tried to "muzzle" him on important issues.