As the Bank of Canada tries to rein in red-hot inflation, the central bank is engaging in another fight: against misinformation.
In recent weeks, the central bank has been using social media to engage the public on the economy, explaining how inflation works and what it’s doing to bring inflation back to its two per cent target.
However, in its most recent Twitter thread, the bank went beyond explaining economics and took direct aim at a common attack levied against its policy decisions during the pandemic.
“#YouAskedUs if we printed cash to finance the federal gov’t. We didn’t,” the Bank of Canada tweeted on Thursday, followed by a series of tweets refuting the claim.
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.
“The only people who pay attention are insiders and market experts. And that’s usually the only people that they have to talk to,” Gordon said.
<a href=”https://twitter.com/hashtag/YouAskedUs?src=hash&ref_src=twsrc%5Etfw”>#YouAskedUs</a> if we printed cash to finance the federal gov’t.<br><br>We didn’t.<br><br>???? Keep reading to learn how we supported the economy from the shock of the pandemic. <a href=”https://twitter.com/hashtag/CdnEcon?src=hash&ref_src=twsrc%5Etfw”>#CdnEcon</a> <a href=”https://twitter.com/hashtag/AskTheBoC?src=hash&ref_src=twsrc%5Etfw”>#AskTheBoC</a><br><br>1/6
Today’s high inflation environment and the politicization of the central bank has led to a wider audience, with more Canadians concerned about rising interest rates and the high cost of living. Alongside this heightened interest has also come a level of distrust of the Bank of Canada’s operations and a misperception that it printed money during the pandemic.
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.
He’s 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.
“There’s always been this expression of the bank printing money whenever they engage in these kinds of policies, but it’s not actually what happens,” said Jeremy Kronick, the director of Monetary and Financial Services Research at the C.D. Howe Institute.
The policy Kronick refers to is quantitative easing, a measure the Bank of Canada attempted to explain in a series of tweets.
A car moves past the Bank of Canada on July 12, 2022. Central bank officials normally hold speeches and other events to communicate their thinking and to set expectations. (Sean Kilpatrick/The Canadian Press)
“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.
“We did not print cash to pay for the bonds,” the thread went on to say.
Risk of deflation
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. Federal Reserve in the aftermath of the 2008 financial crisis.
The Bank of Canada used this policy tool for the first time when the pandemic hit to fight off the risk of deflation. It bought government bonds from financial institutions using settlement balances, or reserves, that it deposited into the accounts of financial institutions and paid interest on. As the bank stated, these reserves are not the same as cash.
“That purchase of the bond lowers the interest rate on that bond and therefore lowers other interest rates, which makes it cheaper to borrow for you and me. So that’s really where QE has its impact, not so much from the exchange,” Kronick said.
People walk near the Bank of Canada on July 12, 2022. (Sean Kilpatrick/The Canadian Press)
The Bank of Canada began the process of quantitative tightening, where bonds are sold back to financial institutions or allowed to mature without being replaced, in April of this year. The central bank has opted for the latter option.
While the Bank of Canada’s motivation to speak directly with Canadians and justify its policies is understandable, Gordon says he’s unsure how effective its efforts are given the central bank doesn’t have much experience in this realm.
“They don’t have nowhere near the media arsenal of the people who are trying to promote the wrong agenda. So, they’re in some sense massively outgunned,” he said.
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.
The online poll surveyed 5,032 Canadian adults and was conducted between June 7 and 13. It cannot be assigned a margin of error because according to the polling industry’s generally accepted standards, online surveys do not randomly sample the population.
Looking ahead, the Bank of Canada plans to expand its educational programming on the economy and the bank’s role.
Kronick meanwhile says what will ultimately help foster trust in the Bank of Canada is bringing inflation back down to target.
“What matters and what will regain that trust is the bank getting inflation back under control.”
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
