The wording of the Bank of Canada’s new mandate has changed but the substance of it remains essentially the same, several economists say.
Canadians can expect the country’s central bank to continue to aim for low, stable and predictable inflation. And when it comes to the impact of low interest rates on the housing market, it will be up to the government — not monetary policy — to get a handle on runaway home prices.
In a joint press conference on Monday, Finance Minister Chrystia Freeland and Bank of Canada governor Tiff Macklem announced the details of the new five-year mandate, the compass that will guide the central bank’s monetary policy decisions until the end of 2026. While the Bank of Canada makes monetary policy decisions independently, every five years the federal government gets a say in the overall framework under which the bank operates.
According to the new mandate, the “primary objective” of the Bank of Canada will continue to be to pursue an inflation target of two per cent, as it has done since 1991.
The new framework also instructs the central bank to put new emphasis on the labour market when weighing how its policy options. But the new twist won’t change much in practice, according to economists interviewed by Global News.
That’s because the new mandate stops short of making full employment a second target for the Bank of Canada as it is for U.S. Federal Reserve. Economists define full employment as an ideal labour market in which everyone who wants to work can find a job.
“This is really a repackaging of the existing mandate for the Bank of Canada in a new candy wrapper,” says Avery Shenfeld, chief economist at CIBC.
The Bank of Canada’s approach to the housing market, where prices are affected by the cost of borrowing, will also remain the same, according to the documents backing the decision.
6:46 No short-term solutions to rising cost of living: former Bank of Canada governor
No short-term solutions to rising cost of living: former Bank of Canada governor
Canada already aiming for full employment, economist says
Aiming for full employment was already “inherent” to the central bank’s approach to policymaking, Shenfeld adds.
And the new mandate stops short of defining what full employment is, says Chris Ragan, director of the Max Bell School of Public Policy at McGill’s University.
Ragan, along with other economists commenting on the new mandate on Twitter, expressed relief over the decision not to formally add full employment as a second target for the central bank.
“People like me who think the central bank shouldn’t have a dual mandate argue that the central bank already cares about things like employment and unemployment and the output gap and real GDP growth,” he says.
“But the only thing (the Bank of Canada) can really influence in a sustained way is inflation,” he adds. “So set the target up as inflation.”
To manage inflation, the Bank of Canada adjusts its trend-setting interest rate, which affects the general level of interest rates in the economy. When interest rates go up, it becomes more expensive for individuals and businesses to borrow, which usually cools off economic activity and slows down inflation. Lowering interest rates, on the other hand, tends to stimulate economic activity and put upward pressure on inflation.
The central bank may, in certain instances, have to hold its key interest rate “at a low level for longer than usual,” according to the documents.
But the way the Bank of Canada was targeting inflation — at two per cent within a range of one and three per cent — was already explicitly flexible, Shenfeld notes.
“They weren’t trying to steer inflation every minute of the day to two per cent, but rather get the economy to a fully employed position where we could have, on average, two per cent inflation,” he adds.
The mandate renewal documents also mention the Bank of Canada “systematically” reporting to Canadians about how labour market impacts factor into its monetary policy decisions.
That likely means the Bank of Canada governor will have to spend more time talking about how variables like employment, unemployment and vacancy rates influenced its thinking when making their appearance on Parliament Hill, Ragan says.
“I think that’s actually a good thing,” he says. “The more the bank can communicate … the underlying logic of its policy actions to the Canadian people (the better).”
2:14 Canada’s inflation rate soars to 4.7% in October
Canada’s inflation rate soars to 4.7% in October – Nov 20, 2021
What about the housing market?
If the brainstorming behind the new mandate led to a new emphasis on the job market, it did not include new thinking on the housing market.
Canada has seen a record spike in home price appreciation during the pandemic, with the national average home prices up 18 per cent in October compared with the same month in 2020, according to data from the Canada Real Estate Association (CREA).
Persistently low interest rates contribute to a hot housing market by making it cheap to carry a mortgage, which also drives up household debt levels.
“A prolonged period of low interest rates could contribute to a buildup of financial vulnerabilities,” reads the 74-page report that backs the Bank of Canada’s new mandate.
The value of Canada’s household debt now exceeds that of the country’s GDP, and its relative size has doubled since 1990, according to the document.
Still, government policies are “better suited” than monetary policy to addressing those vulnerabilities, the document reads.
“There are some problems created by (having) very low interest rates for long and rising house prices is one of them,” Ragan says. “But there are also benefits created from those low interest rates, which is to support that demand.”
“We haven’t figured out how to solve rising house prices,” he adds, “but I would be the first to argue that it’s not really monetary policy problem to do that.”
Most job search advice is cookie-cutter. The advice you’re following is almost certainly the same advice other job seekers follow, making you just another candidate following the same script.
In today’s hyper-competitive job market, standing out is critical, a challenge most job seekers struggle with. Instead of relying on generic questions recommended by self-proclaimed career coaches, which often lead to a forgettable interview, ask unique, thought-provoking questions that’ll spark engaging conversations and leave a lasting impression.
Your level of interest in the company and the role.
Contributing to your employer’s success is essential.
You desire a cultural fit.
Here are the top four questions experts recommend candidates ask; hence, they’ve become cliché questions you should avoid asking:
“What are the key responsibilities of this position?”
Most likely, the job description answers this question. Therefore, asking this question indicates you didn’t read the job description. If you require clarification, ask, “How many outbound calls will I be required to make daily?” “What will be my monthly revenue target?”
“What does a typical day look like?”
Although it’s important to understand day-to-day expectations, this question tends to elicit vague responses and rarely leads to a deeper conversation. Don’t focus on what your day will look like; instead, focus on being clear on the results you need to deliver. Nobody I know has ever been fired for not following a “typical day.” However, I know several people who were fired for failing to meet expectations. Before accepting a job offer, ensure you’re capable of meeting the employer’s expectations.
“How would you describe the company culture?”
Asking this question screams, “I read somewhere to ask this question.” There are much better ways to research a company’s culture, such as speaking to current and former employees, reading online reviews and news articles. Furthermore, since your interviewer works for the company, they’re presumably comfortable with the culture. Do you expect your interviewer to give you the brutal truth? “Be careful of Craig; get on his bad side, and he’ll make your life miserable.” “Bob is close to retirement. I give him lots of slack, which the rest of the team needs to pick up.”
Truism: No matter how much due diligence you do, only when you start working for the employer will you experience and, therefore, know their culture firsthand.
“What opportunities are there for professional development?”
When asked this question, I immediately think the candidate cares more about gaining than contributing, a showstopper. Managing your career is your responsibility, not your employer’s.
Cliché questions don’t impress hiring managers, nor will they differentiate you from your competition. To transform your interaction with your interviewer from a Q&A session into a dynamic discussion, ask unique, insightful questions.
Here are my four go-to questions—I have many more—to accomplish this:
“Describe your management style. How will you manage me?”
This question gives your interviewer the opportunity to talk about themselves, which we all love doing. As well, being in sync with my boss is extremely important to me. The management style of who’ll be my boss is a determining factor in whether or not I’ll accept the job.
“What is the one thing I should never do that’ll piss you off and possibly damage our working relationship beyond repair?”
This question also allows me to determine whether I and my to-be boss would be in sync. Sometimes I ask, “What are your pet peeves?”
“When I join the team, what would be the most important contribution you’d want to see from me in the first six months?”
Setting myself up for failure is the last thing I want. As I mentioned, focus on the results you need to produce and timelines. How realistic are the expectations? It’s never about the question; it’s about what you want to know. It’s important to know whether you’ll be able to meet or even exceed your new boss’s expectations.
“If I wanted to sell you on an idea or suggestion, what do you need to know?”
Years ago, a candidate asked me this question. I was impressed he wasn’t looking just to put in time; he was looking for how he could be a contributing employee. Every time I ask this question, it leads to an in-depth discussion.
Other questions I’ve asked:
“What keeps you up at night?”
“If you were to leave this company, who would follow?”
“How do you handle an employee making a mistake?”
“If you were to give a Ted Talk, what topic would you talk about?”
“What are three highly valued skills at [company] that I should master to advance?”
“What are the informal expectations of the role?”
“What is one misconception people have about you [or the company]?”
Your questions reveal a great deal about your motivations, drive to make a meaningful impact on the business, and a chance to morph the questioning into a conversation. Cliché questions don’t lead to meaningful discussions, whereas unique, thought-provoking questions do and, in turn, make you memorable.
Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers “unsweetened” job search advice. You can send Nick your questions to artoffindingwork@gmail.com.
CALGARY – Canadian Natural Resources Ltd. reported a third-quarter profit of $2.27 billion, down from $2.34 billion in the same quarter last year.
The company says the profit amounted to $1.06 per diluted share for the quarter that ended Sept. 30 compared with $1.06 per diluted share a year earlier.
Product sales totalled $10.40 billion, down from $11.76 billion in the same quarter last year.
Daily production for the quarter averaged 1,363,086 barrels of oil equivalent per day, down from 1,393,614 a year ago.
On an adjusted basis, Canadian Natural says it earned 97 cents per diluted share for the quarter, down from an adjusted profit of $1.30 per diluted share in the same quarter last year.
The average analyst estimate had been for a profit of 90 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Oct. 31, 2024.
CALGARY – Cenovus Energy Inc. reported its third-quarter profit fell compared with a year as its revenue edged lower.
The company says it earned $820 million or 42 cents per diluted share for the quarter ended Sept. 30, down from $1.86 billion or 97 cents per diluted share a year earlier.
Revenue for the quarter totalled $14.25 billion, down from $14.58 billion in the same quarter last year.
Total upstream production in the quarter amounted to 771,300 barrels of oil equivalent per day, down from 797,000 a year earlier.
Total downstream throughput was 642,900 barrels per day compared with 664,300 in the same quarter last year.
On an adjusted basis, Cenovus says its funds flow amounted to $1.05 per diluted share in its latest quarter, down from adjusted funds flow of $1.81 per diluted share a year earlier.
This report by The Canadian Press was first published Oct. 31, 2024.
