The Bank of Canada has come under a rare attack from critics after misjudging inflation and locking itself into rigid forward guidance that prevented it from reacting swiftly as prices surged and Canada’s economy began to overheat.
One of the world’s leading central banks, it is now being forced to play catch-up, hiking interest rates more aggressively than originally expected just as Canadian household debt levels hit new highs, surging far above other G7 nations.
With a possible recession looming, the bank is facing questions from politicians, economists and even the general public about the opacity of its decision-making process and renewed calls for it to release minutes, a common practice among many of its peers.
For its part, the Bank of Canada has admitted missteps and is promising more transparency, including an analysis of inflation forecast errors, due in July.
But it still faces near daily attacks by politician Pierre Poilievre, the frontrunner to lead the opposition Conservative Party, who regularly takes to social media to accuse the central bank of being both incompetent and a government puppet.
He has also pledged to fire Governor Tiff Macklem if elected, a move that would require changing the law but that nevertheless underscores the level of discontent.
“Is there always room for more transparency? Probably. That’s something that we’re reflecting on right now,” Senior Deputy Governor Carolyn Rogers told Reuters in an interview this month. “It’s something we think about a lot.”
The Bank of Canada, which is independent in setting policy, has not faced this level of political heat since the early 1990s, when then-Liberal opposition leader Jean Chretien railed against Governor John Crow over his high-interest rate policy.
Poilievre, not yet an opposition leader, is unlikely to become prime minister anytime before 2025, when the next election is due. But his attacks come at a time when public trust that the central bank will curb inflation is vital for the economy.
The Bank of Canada, like many other central banks, held that inflation was “temporary” or “transitory” into the fall of 2021, and did not start raising rates until March 2022, when inflation was already more than double the 2% target.
Prices are now rising at levels not seen since 1983, hitting 7.7% in May, and above target for 15 months. With the price of everyday essentials surging, the risk of inflation becoming entrenched is growing.
A Conference Board of Canada survey released this week found three-quarters of Canadians expect inflation to still be above target in three years. And the Bank of Canada’s own data shows declining trust in its ability to keep inflation low and stable.
“How do we maintain credibility? The number one thing we do is we get inflation back to target and we’re absolutely focused on doing that,” Rogers said.
“It’s not going to happen overnight,” she added. “But we have laid on a path and we’re on the job.”
‘A FAIRLY SERIOUS COMMUNICATIONS MISTAKE’
The slow start came in part because the bank locked itself into forward guidance in July 2020, promising to keep interest rates at rock-bottom levels until “the economic slack is absorbed,” which was expected to take years.
“If you’ve got a mortgage or if you’re considering making a major purchase… you can be confident rates will be low for a long time,” Macklem said in July 2020.
Sticking to the forward guidance was necessary, said Rogers, because “that’s how we know it’ll work next time.”
But doing so tied the bank’s hands and forced it to react more slowly than it typically would have as parts of the economy overheated, according to interviews with economists and a former central banker.
Macklem also signaled he wanted a full labor market recovery before raising rates, which was later confirmed when the bank’s policy mandate was renewed in December, creating an even more dovish outlook for rates.
David Dodge, Bank of Canada governor from 2001 to 2008, said Canadians were led to believe the central bank was not overly worried about inflation and therefore would hold interest rates “at essentially zero forever, come hell or high water.”
That was “a fairly serious communications mistake,” Dodge told Reuters.
Dodge and others Reuters spoke to all made it clear the central bank was correct to respond forcefully at the onset of pandemic and said the unprecedented nature of the crisis made outcomes difficult to predict.
“We got a lot right. We got some things wrong. We’ve been transparent about that,” Rogers said. “Our job relies on our ability to forecast and in this environment forecasting has been a really big challenge for everyone.”
Trudeau and Finance Minister Chrystia Freeland have defended the central bank’s independence and attributed surging prices to global supply chain woes and the unexpected war in Europe.
“Nobody gets everything right,” said a senior government source. “But what (the Bank of Canada) didn’t get right was that (Vladimir) Putin was going to invade Ukraine.”
Economists agree the war in Ukraine complicated the situation and drove inflation sharply higher, though it was already becoming persistent before the invasion. Complicating the situation, the central bank is now raising rates even as the federal government continues to unroll stimulus.
Freeland’s office defends that choice, saying this year’s budget is on “a path of swift fiscal tightening – particularly by the standards of our peers,” a ministry spokeswoman said.
With markets betting on a 75-basis-point increase in July, economists say the aggressive tightening risks undermining the bank’s credibility with a public promised cheap money but now facing surging debt servicing costs.
Canada’s once red hot housing market is already showing cracks from higher interest rates, with sales plunging and prices falling off February’s peak.
And the higher rates don’t seem to be helping slow runaway prices, said Ottawa resident David Strva, adding he wasn’t sure he trusted the Bank of Canada to get inflation back to target.
“If they’re only increasing interest rates and that’s the main control they have, I’m not sure how much that’ll do,” he said with a shrug. “Inflation is still going up.”
One way to win back public trust is to release minutes of central bank meetings, said Derek Holt, vice president of capital markets economics at Scotiabank.
“The Bank of Canada says that it is consensus-driven, so if that’s really true in reality, then they should have absolutely no problem disclosing how this consensus was achieved,” he said.
For its part, the Bank of Canada says the fact it takes decisions by consensus is exactly why it does not need formal minutes, and that its quarterly monetary policy report statements “bring transparency to the deliberations.”
Rogers said the bank does its best to “lay out the different perspectives” in its speeches and statements.
But so far, it is doing little to quell critics. Poilievre, a populist and Bitcoin enthusiast, continues to drive the narrative across social media, with tweets and Facebook posts that get thousands of likes from his half million followers.
“They did what Trudeau told them: print money for deficits, causing runaway inflation & a dangerous housing bubble,” he wrote in a tweet earlier this month.
Reporting by Julie Gordon and Steve Scherer in OttawaEditing by Denny Thomas and Deepa Babington
Woman held hostage during B.C. bank shooting experiencing roller-coaster of emotions
Shelli Fryer was wide awake at 2:54 on Canada Day and hoped the stack of messages piling up in recent days could help her close her eyes.
The 59-year-old Langford, B.C., woman said she’s been having trouble sleeping since Tuesday when she was among those held hostage during a violent bank shooting in Saanich.
The messages pouring in since then, she said, have offered some of the comfort she’s sought and commended her bravery during the ordeal.
“There is just so much love I’m getting from all these strangers,” she said in a telephone interview. “It’s overwhelming.”
Six officers were shot and 22-year-old twin brothers identified as Mathew and Isaac Auchterlonie from Duncan, B.C., were killed in the shootout with police on Tuesday outside the Bank of Montreal in Saanich.
Police have said multiple explosive devices were found in a vehicle linked to the two men, who have yet to be identified. Officers are still investigating the possibility of a third suspect.
Fryer has been mentally replaying Tuesday morning’s events ever since.
She pulled her blue Ford Bronco into the bank’s parking lot for an 11 a.m. appointment with the manager about a loan. Within a minute or two of sitting down in his glass-panelled office, Fryer said they heard a loud boom.
“The manager said ‘we’re being robbed’. He knew right away.”
The 17 women and five men in the branch that day all got on the grey floor immediately, Fryer said. She described the suspects as wearing all black including balaclavas, gloves, jackets, vests, body armour and pads covering the calves from the knee down.
One suspect came up to the bank manager and said “vault,” she recalled.
“He stared right at me twice. For 20 seconds,” she said. “But I couldn’t see his eyes. I couldn’t see his mouth. I couldn’t see any skin tone whatsoever.”
The manager tried to hand over the keys but the suspect pointed towards the vault and they walked off together, leaving Fryer in the room. She waited for the gunman to come back for her.
“I think he forgot about me,” she said.
Fryer got down on the floor and called the police. Her phone’s call log shows she dialed 911 at 11:04 a.m.
She whispered a description of the situation into the phone, fearing all the while she’d draw attention to herself by breaking the “eerie silence” that had descended on the branch, she said.
She left the phone on so the 911 operators could hear what was going on, turned down the volume so the suspects couldn’t hear if emergency personnel spoke and covered the phone with her long pink skirt so it wouldn’t be visible, she said.
For what “felt like an eternity,” she said there was “dead silence.”
Fryer said she felt little fear and experienced no dramatic moments as she hid behind a chair she doubted offered much protection.
“It was actually more like, ‘I think we’re gonna get out of this,’” she said. “I need to get the police though here. I’m just gonna let the police know. If the police get here, it will be OK.”
But then an “almighty hail of gunfire” rang out, she said, gasping at the remembered shock.
That’s when she ran and hid alone under a shelf in the manager’s office while others took shelter in a filing room.
Fryer said that while she felt the urge to panic with one half of her brain, the other half was reminding her to “just breathe.”
“‘The worst thing that’s going to happen is, those shots will go right through the drywall and you’re going to be hit,’” she remembered thinking.
Fryer’s phone shows her call with 911, and the ordeal, lasted one hour, 26 minutes and five seconds.
While Fryer’s recollections of the attack are sharp, she said the rest of the day passed in a blur of police interviews, arrangements to retrieve her car and finally a meal of Asian food with her daughter.
The trauma of being held hostage comes in waves, she said. Fryer has spoken with police and victim services about how she feels, and she said she’s been told it will take time to process what she’s been through.
“It’s back and forth, you know? It’s like grief. You go through the whole stages, right? Sometimes you may never hit the last stage.”
But in the quiet moments, Fryer said she most often remembers seeing police walk through the bank door and hearing their concern for those trapped inside.
“The first words each and every officer said to us was, ‘I’m sorry this is happening to you.’ Even when they just came in from the gunfire,” she said. “… And much, much later we find out that six of their brothers-in-arms had been shot and injured.”
She feels “horrible” and “guilty” because she didn’t think about asking the officers whether any police had been injured, she said, though she and others inquired after the welfare of civilians.
“And each and every one of their energy and body language walking in and out of the crime scene did not give us any reason to even think to ask, ‘were any officers injured?’”
Saanich police Chief Const. Dean Duthie said three of the officers remain in hospital, including one in intensive care, while another will require more surgeries.
Fryer was born in Chicago and came to Canada when she was seven. Her experience with the police last week has made her feel “extra proud” to be Canadian, she said.
Since Tuesday when she started talking about her experience at the bank, Fryer said apart from strangers she’s also got messages from people whom she knew in another lifetime.
She got an email from her first roommate with whom she lived while working her first job after graduating high school when she was 18.
“We lived together for like eight years, and I was a bridesmaid at her wedding. I haven’t seen her since 1989. She reached out. Isn’t that funny?” she said.
“This is going to be life changing in many ways for me and I’m very grateful now because it could be very cool.”
Fryer has also been able to find levity — such as what to do with the outfit she was wearing on Tuesday at the bank – a long sleeve shirt, pink maxi skirt and pink high-heeled sandals.
“I’m going to throw it out,” she said. “I’ve had it for so long anyway. Or I should frame it. I really liked it too, though.”
She even plans to return to the bank, whose employees she said showed incredible professionalism under duress and whose manager she described as unflappable.
“I have to finish my appointment,” she said with a laugh. “I sat down for two minutes. We got interrupted.”
This report by The Canadian Press was first published July 2, 2022.
Hina Alam, The Canadian Press
B.C. RCMP identify twin brothers as B.C. bank shooting suspects
Mounties spokesman Cpl. Alex Bérubé named the men as 22-year-olds Mathew and Isaac Auchterlonie from Duncan, B.C.
Six officers were shot and the brothers were killed in the shootout with police on Tuesday outside the Bank of Montreal branch.
Bérubé said officers have spoken with the twins’ relatives, who are co-operating with the investigation.
Investigators are looking into the suspects’ backgrounds, and he said neither man had a criminal record or was known to police.
“We understand that the release of the names of the two deceased may answer the who, but there are still many outstanding questions and investigation efforts that need to take place in order to fully understand what took place and why,” Bérubé told a news conference.
“The motive behind the armed robbery and subsequent exchange of gunfire with police has not yet been determined.”
Police have also confirmed that the twins are associated with a white four-door 1992 Toyota Camry that has two black racing stripes over the hood and roof, Bérubé said.
The car was found with multiple explosives, which were removed and destroyed last week
Bérubé said the investigation has so far determined that there were only two suspects in the bank.
“However, we are continuing to look into whether anyone else was involved or associated to the events on Tuesday.”
An update on the condition of the injured officers wasn’t given.
Earlier, Saanich Chief Const. Dean Duthie had said three of the officers remain in hospital, including one who is in intensive care while another will require more surgeries.
This report by The Canadian Press was first published July 2, 2022.
The Canadian Press
Transphobia is gaining ground in the U.S. Gender-diverse people in Canada worry it could happen here – CBC.ca
Amanda Jetté Knox doesn’t know who tried to throw a bottle at them from a vehicle while walking home in Ottawa last month, but remembers the feeling of it barely missing their head.
“[It] hit my bangs as it went by,” said Jetté Knox, who identifies as non-binary and uses she/they pronouns. “[They] called me a f–king freak and drove off.”
It was the first time Jetté Knox experienced anything so violent but the proud activist and author has endured plenty of hateful comments since publicly sharing their family’s story several years ago. One of Jetté Knox’s four children is non-binary and came out in 2014; the next year, Jetté Knox’s spouse came out as transgender woman.
Now, they are closely watching the anti-LGBTQ hate billowing in the United States, where gender diversity and gender expression have become popular targets for Republican politicians, far-right groups and online trolls.
Jetté Knox, and other advocates and experts, see it spreading in Canada as well.
Threatening phone calls recently led to a family-friendly drag performance at Victoria café being called off, while other drag-queen storytime events at public libraries elsewhere in Canada have also been subject to intimidation. Pride flags have been ripped down and/or destroyed in London, Ont., Delta, B.C., and Ottawa. In early June, a 17-year-old was arrested in Mississauga, Ont., for allegedly threatening to carry out a mass shooting at a West Palm Beach, Fla., Pride celebration.
“It feels like it’s just a matter of time before we start seeing more of this in our own backyard,” Jetté Knox told CBC News.
“I’m a pretty positive person, but I’m worried right now.”
Hate ‘spilling over the border,’ says prof
Anti-trans and anti-LGBTQ hatred is something that is always “simmering,” including in Canada, said Prof. Barbara Perry, director of the Centre on Hate, Bias and Extremism based at Ontario Tech University in Oshawa.
A survey released by Statistics Canada in 2020 found transgender people had a greater likelihood of experiencing physical or sexual violence than non-transgender people in Canada. They were also more likely to experience “inappropriate behaviours” in public, at work, and online, which Statistics Canada defined as acts that “make people feel unsafe or uncomfortable” and have a lasting impact on mental and physical health.
But it appears far-right groups here have become more emboldened by what Perry describes as the “horrific narratives and policy shifts” seen in the U.S.
Since the start of this year, the U.S.-based Human Rights Campaign has documented more than 300 proposed bills, introduced in 36 states, that directly target transgender rights, gender diversity and expression. These include attempts to investigate families helping affirm their child’s gender identity to outright limiting education and conversation about LGBTQ people, restricting trangender children from participation in sports, and even going so far as to attempt to bar children from attending drag performances.
“That’s spilling over the border, obviously, into the Canadian narrative as well, and informing the far-right here,” Perry told CBC News.
Advocates accused of ‘grooming’ children
Harmful language aimed at smearing transgender people, and those who support them, as preying upon or indoctrinating children is routinely used online and in right-wing media — in particular, “grooming” or “groomer.”
It’s a trope long been used to disparage LGBTQ people that’s seeing a steep rise in usage online.
Jetté Knox said they get called a groomer online “almost every day” because of their gender identity, because they’re raising non-binary child, or because of their activism for transgender rights.
It’s also happened in person. They were travelling in the United States recently and attended a Virginia school board meeting, with friends and their children, to recognize Pride Month. Protesters hurled insults at them.
“Some pretty awful things were said,” Jetté Knox recalled. “We were told we were indoctrinating children.”
The Canadian Anti-Hate Network has documented that narrative appearing in far-right political discourse in this country.
WATCH | A Human Rights Campaign montage of language used against transgender people:
Cancer. Terrorist. Problem.<br><br>These are the ways anti-LGBTQ+ lawmakers nationwide are describing the people they serve. <a href=”https://t.co/NrS2LlgRZq”>pic.twitter.com/NrS2LlgRZq</a>
It’s actually far-right groups who are “grooming” people, said Perry, slowly luring new followers to their ideologies by latching onto their concerns and uncertainties.
Some far-right, religious and other groups have portrayed gender-affirming care for transgender youth as “child abuse” and push to restrict access to health care such as hormones to delay puberty and promote development consistent with a child’s gender identity.
Various medical groups, including the American Medical Association, say such policies are “dangerous” and “foregoing gender-affirming care can have tragic health consequences.”
It’s a means of “lending credibility and legitimacy” to extreme views, Perry explained, because they’re presented as “protecting the vulnerable.”
Transphobia a ‘gateway’ to far-right ideology
Focusing on transgender and gender-diverse youth is one way of gaining public approval for broader acceptance of anti-transgender policies and attitudes, said Florence Ashley, a doctoral candidate at the University of Toronto Faculty of Law and Joint Centre for Bioethics whose work revolves around trans rights.
“Transphobia tends to oftentimes be the sort of like gateway into the far-right,” said Ashley, who uses they/them pronouns.
They noted how social media algorithms also play a role in this. The U.S. non-profit Media Matters For America, for example, examined how anti-trans content on TikTok served as a gateway to far-right and white supremacist content, conspiracy theories and even calls to violence.
Ashley also highlighted similarities the current climate of transphobia has with what’s known as the “great replacement” conspiracy theory disseminated by far-right and white nationalist movements, and in some conservative media outlets. It’s a racist claim that white people are being systematically replaced by immigrants.
The feeling of “losing power in society,” they explained, makes it easier to blame the people you perceive as “trying to replace you.”
It’s something that happens “in times of crisis and high anxiety as we’ve seen over the last couple of years,” said Perry. “We’re always looking for scapegoats, looking for somewhere to direct our anger or fears or anxieties.”
Political power balance can change in an instant
While gender identity and expression are protected under the Canadian Human Rights Act and Criminal Code, Jetté Knox is unnerved by the emergence of “more far-right parties,” some of which have candidates who criticize gender diversity and expression.
They worry voters may not be keeping as close an eye on the comments and promises such candidates make about gender diversity issues because it doesn’t an affect their lives the way it impacts Jetté Knox’s LGBTQ family.
Ashley warned it only takes a “shift in political power for groups to really start asserting their will on a population” and that’s why people in Canada should be closely watching what’s happening in the U.S.
They noted how the recent U.S. Supreme Court, stacked with conservative justices during Donald Trump’s single term in office, overturned Roe v. Wade, the nearly 50-year-old decision that enshrined the right to access abortion. That ruling could set a precedent to reverse decisions on same-sex marriage and same-sex intimacy for consenting adults, something Justice Clarence Thomas alluded to in his concurring opinion on the Roe v. Wade ruling.
Jetté Knox urged those who care about the rights and freedoms of gender-diverse people to vote.
“Watching those rights being attacked elsewhere puts a lot of fear in me because it means that they can be attacked in Canada too,” they said. “I think that those things will be challenged and I think that we have to get ready for it.”
Creating a positive online space for trans people
Despite the apparent rise of online slurs and hate against LGBTQ people, young transgender people like Vancouver’s Noah Yang are helping maintain positivity in online spaces and inform others about transgender experiences.
Yang, who uses the pronouns he and him, shares his gender-affirmation journey on Instagram. He said he’s fortunate to have only experienced negativity “a handful of times” and has largely received encouragement.
“It was unexpected that showing the physical scars and the physical changes would inspire people and, you know, open people’s eyes up to … what can really happen throughout someone’s transition.”
He acknowledges not everyone has the ability to drown out the negativity being directed at gender-diverse people. But, for Yang, the importance visibility outweighs any hate.
“I do think it is beneficial because I feel that, you know, it’s not just trans folks who see the page,” he said.
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