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The Progressive Economics Forum: When Bad News is Good News: Harper’s Call to Poloz

Was there any concrete economic reason for Stephen Harper to call Stephen Poloz yesterday, as global stock markets continued their gyrations? And then to have his office subsequently issue a cryptic and rather foreboding statement about the conversation?

Of course, Prime Ministers and central bank governors talk to each other every now and then — but these conversations, for obvious reasons, are rarely publicized. And since we are in an election campaign, the meeting was all the more odd.

Poloz himself has no control over the actions of the markets. And his response to any macroeconomic damage that (Read more…)

The Progressive Economics Forum: Is another recession on its way?

Is another recession on its way?

Louis-Philippe Rochon

Associate Professor, Laurentian University

Co-editor, Review of Keynesian Economics


Canada’s economy shrank in the first quarter by a whopping 0.6%. Is this the beginning of a new recession?

Recessions of course are defined as two consecutive quarters of negative growth. Now we learn today that Canada’s economy shrank between January and March, the biggest decline in GDP since 2009, and the first contraction in the last four years. In fact, the economy contracted in all three months. It is even more dramatic when you think that Q4 2014 registered a (Read more…)

The Progressive Economics Forum: The central banker who talked too much

The central banker who talked too much

Louis-Philippe Rochon

Associate Professor of economics, Laurentian University

Co-Editor, Review of Keynesian Economics


On Tuesday, Governor of the Bank of Canada, Stephen Poloz testified in Ottawa in front of the House of Commons Standing Committee on Finance. He had a lot to say about the state of the Canadian economy. But sometimes saying nothing is better.

I want to make clear that I have great respect for Mr. Poloz. His approach to monetary policy in Canada has been rather balanced. He has kept rates low at a time when they should be (Read more…)

The Progressive Economics Forum: Bank of Canada Holds Rate Steady

The Bank of Canada released it’s quarterly Monetary Report today, and held rates firm at 3/4 per cent.

The Bank cut growth expectations for 2015, but expects Canada’s GDP to rebound in 2016. Much of this rebound will depend on a growing U.S. and global economy, and on the ability of Canadian exporters to capture a bigger share because of our lower dollar.

The Bank’s estimates for growth also depend on maintaining strong consumer demand, which may be difficult to maintain given high levels of household debt and lingering labour market weakness.

The underlying thinking behind the Bank’s optimism is that the (Read more…)

Cowichan Conversations: Rocco Galati in court to challenge how Bank of Canada does business

Richard Hughes-Political Blogger

The mysterious world of money, making it, printing it,spending it. There has been contrary views regarding the role of banks in controlling our money supply since the Bank of Canada stepped away from providing debt free money to cities, town and municipalities.

Across the country, budgets are being prepared at all levels of government. Local boards and councils wrestle with funding facilities and services for their communities. The impacts of interest free money should gather considerable interest. Why was the role of the Bank of Canada changed from its established direction and purpose?

We should look at (Read more…)

Cowichan Conversations: Bank of Canada Court Case Won in Federal Court-Huge Ramifications Claimed

Richard Hughes-Political Blogger

A great many Canadians have heard various rumblings about the wealth transfer scheme that kicked in shifting a great deal of control and profit from the Bank of Canada to the private banks. Money for nothing is a sense.

There has been a fair amount of chatter floating about on Facebook, Twitter and of course landing in our email inboxes.


Here is what is purported to be a “Good News” story for Canadians.

The Progressive Economics Forum: ROCHON: Harper in closet over the economy as Canada heads toward another recession

This guest blog post has been written by Louis-Philippe Rochon.

You can follow him on Twitter @Lprochon

Harper’s recent incarnation as an anti-terrorist crusader has caught many Canadians by surprise. Harper is spending considerable political energy beating the drums of war against terrorists, and introducing a far-reaching, and much condemned, bill aimed at restricting free speech, and increasing police powers. But could this move hide a more cynical purpose? Can there be an ulterior motive?

I think there is, and the reason is quite simple. It’s the economy. Seven years after the beginning of the crisis, and 4 years (Read more…)

The Progressive Economics Forum: Rochon Asks: “Is the Canadian economy unraveling?”

In a recent CBC blog post, Louis-Philippe Rochon assesses the current state of the Canadian economy.

The link to the blog post is here.

Follow him on Twitter @Lprochon.

The Progressive Economics Forum: Rochon on the Bank of Canada’s Decision to Lower the Rate of Interest

Louis-Philippe Rochon—who now blogs for CBC—argues that almost nobody had been expecting the Bank of Canada’s recent decision to lower the rate of interest.

His post can be found here.

Follow him on Twitter @Lprochon.

The Progressive Economics Forum: Banks and Balanced Budgets

The Bank of Canada surprised most analysts this week when it decided to cut rates by 25 basis points. The move comes after the price of oil has tumbled below $50 / barrel, oil producers announced huge cuts to business investment for 2015, Target announced a mass layoff of 17,600 workers in Canada, and the International Monetary Fund warned of a global economic slowdown.

The key message of the January Monetary Policy is that the Canadian economy needs stimulus. The Bank’s view of the Canadian economy stands in sharp contrast to that of the federal government, which is intent on (Read more…)

The Progressive Economics Forum: Low Oil Prices, Good or Bad for Canada?

Unless you’ve been hiding under a rock somewhere, you’re probably well aware that the price of oil has fallen dramatically, to less than $50 / barrel. What this means for Canada’s economic output & labour markets is not yet clear. But Stephen Poloz at the Bank of Canada has said that he expects the effect to be “not trivial”, and suggested that it might lower the Bank’s GDP expectations by around 0.3 percentage points. Deputy Governor Timothy Lane’s talk on January 13th is good background reading on this topic, and overall he suggested that the effect will be at least somewhat (Read more…)

The Progressive Economics Forum: Louis-Philippe Rochon’s Top 10 Economic Predictions for 2015

Louis-Philippe Rochon has written a provocative blog post for the CBC titled “Top 10 Economic Predictions for 2015.”

The post is available here.

The Canadian Progressive: Canadians still demand female representation on banknotes

The call for more female representation in Canada remains loud and clear as an online petition demanding that the Bank of Canada include women on Canadian banknotes opens 2015 with more than 52,800 signatures.

The post Canadians still demand female representation on banknotes appeared first on The Canadian Progressive.

Politics and its Discontents: The Mighty (Pol)Oz Speaks

But his message is not being well-received. No, not at all. Recommend this Post

Cowichan Conversations: Oil and Gas Investors Get Warning–Pension Funds at Risk

Blaise Salmon

Thanks to Mark Carney, former governor of the Bank of Canada and current governor of the Bank of England, for his warning that the “vast majority” of the world’s oil and coal reserves will never be used due to advancing climate change.

The value of these reserves is factored into the share prices of the world’s fossil fuel companies, so this represents a significant risk to pension funds and other investors. Yet most investors seem unaware of the risk. The parallels with the subprime mortgage meltdown of 2008 are striking.

Central bank governors are very careful (Read more…)

The Progressive Economics Forum: Bank of Canada, Exports, and LMI

Much has been made about Stephen Poloz’s decision to abandon ‘forward guidance’ in Bank of Canada rate setting announcements for the time being. Critics bemoan the loss of direction from the Bank. But Poloz’s comments yesterday were chock full of guidance on how the Bank sees Canada’s economic situation.

Having been disappointed by the failure of Canada’s export sector to resume investment or show any signs of life, researchers at the Bank investigated the performance of 2,000 product categories, and found that about 500 of those had very nearly been wiped out following the 2008 – 2009 recession. Further investigation (Read more…)

The Progressive Economics Forum: The Odd Conversion of Mainstream Economists to the Virtues of Depreciation

The long-overdue depreciation of Canada’s currency is gathering steam. The dollar lost 8 cents against its U.S. counterpart, in fits and starts, over 2013. It’s lost another 2 cents since the start of 2014, and negative sentiment about the currency is accumulating among financial analysts and traders.

Indeed, once the expectation that the loonie will fall becomes entrenched among enough of the red-suspendered trading set, that belief quickly becomes self-fulfilling. Speculators who think the loonie will fall, sell or short the asset to take advantage of that fall, and this only accelerates the decline. So we can expect the (Read more…)

Political Eh-conomy: Myths of central banking

The Bank of Canada has been in the news lately – or, more precisely, the news has been full of other well-placed people telling our central bankers what to do. In an interview on CTV this past weekend, Jim Flaherty made comments (later retracted) that Canada’s central bank will be pressured to raise interest rates sooner rather than later. On Tuesday, the influential, pro-business Conference Board of Canada also came out with some advice. A Globe and Mail editorial written its chief economist suggested, somewhat surprisingly, that the Bank should target a higher level of inflation, up to 4% from (Read more…)

The Progressive Economics Forum: A Trillion Dollar Coin for Canada?

Arun here…breaking radio silence to share with you a thought-provoking piece by Larry Kazdan, a graduate of York University in sociology and history, and currently a Council Member with the World Federalist Movement-Canada, an organization that monitors developments at the United Nations and advocates for more effective global governance.

Our friend and fellow blogger Keith Newman recently wrote some words that set up Larry’s piece nicely so rather than trying to reinvent the wheel, I will let Keith introduce Larry’s work and then urge readers to read the piece in full.

****************************** The trillion dollar coin solution for the US (Read more…)

The Progressive Economics Forum: Rebutting Raganomics

Today, I had the following commentary posted on The Globe and Mail’s Economy Lab:

The loonie is overvalued and the Bank of Canada has room to act

On Tuesday, Christopher Ragan characterized the notion of an overvalued Canadian dollar as a “seductive myth” that the Bank of Canada should not act to address. I have made the case that we should broaden our central bank’s mandate to include managing the exchange rate and welcome the opportunity to advance this important policy debate.

Significantly, Ragan agrees that currency “depreciation would spur Canadian exports and provide a much-needed stimulus to (Read more…)

The Progressive Economics Forum: Statistics Canada Resuscitates Dead Money

Interestingly, the day after the new Bank of Canada Governor gave a speech distancing himself from his predecessor’s “dead money” comments, Statistics Canada released a significant downward revision to the usual measure of corporate cash accumulation.

The cash holdings of private non-financial corporations reached $594 billion in the fourth quarter of 2012, so I was curious to see if they would crack $600 billion in the first quarter of this year. To my surprise, today’s National Balance Sheet Accounts indicate a corporate cash hoard of “only” $535 billion in the fourth quarter and $544 billion in the first quarter.

I (Read more…)

The Canadian Progressive: When a satirical $90,000 Sen. Duffy bill enraged the Bank of Canada

By: Obert Madondo

Satirical Duffy $90,000 Bill

Veteran B.C. newspaper satirist Dan Murphy engaged in a little good old-fashioned Canadian political satire when he created a fake $90,000 bill starring scandal-plagued Sen. Mike Duffy. The Bank of Canada wants us to believe a serious crime has been committed here, according to Times Colonist.

The video below explains the satirical bill’s key ingredients: fake high-tech security features, bacon scent, a singing and burping Duffy and a winking hologram of Nigel Wright, PM Stephen Harper’s former chief of staff.

How does the Bank of Canada respond? It dispatched a threatening email to (Read more…)

Politics and Entertainment: why focus on inflation when there is little evidence of a inflationary trend while there are abundant statistics revealing just how bad things are for both the unemployed and the underemployed.

One of the official goals of central bank monetary policy is supposed to be low employment fostered through what is known as an expansionary policy by lowering interest rates with the hope that low credit rates will encourage businesses to expand their operations by way of capital investment in hard assets or capital expenditures of some sort and new hirings. We’ve had this policy in place for quite some time now, and yet employment really hasn’t improved one iota. If anything it’s merely gotten worse along with – because of the incentive of low interest rates –  an astounding increase in personal debt to the unseemly tune (Read more…)

The Progressive Economics Forum: Polozogistics: Nine Thoughts About the Choice of the New Bank of Canada Governor


1. He’s Number Two: Stephen Poloz was widely acknowledged in economic and political circles as the second-best choice for the top job at the Bank of Canada. So the surprise was not that he was chosen. The surprise was, Why Not Tiff Macklem? Will someone please find out and tell the rest of us?

2. Doctrinaire [or not?] on Inflation Targeting: He thinks it’s “sacrosanct.” Having studied with monetary policy guru David Laidler at the University of Western Ontario, and been part of the Bank of Canada team that brought inflation targeting to a neighbourhood near (Read more…)

The Progressive Economics Forum: A Weak Week for Canada’s Economy

On Tuesday, Statistics Canada reported that job vacancies have fallen to the lowest level recorded since it began collecting these figures two years ago.

On Wednesday, the Bank of Canada projected growth of just 1.5% for this year.

On Thursday, Statistics Canada reported that the number of Canadians receiving Employment Insurance (EI) benefits edged down in February. Meanwhile, the Labour Force Survey indicates that unemployment edged up in February and grew much worse in March.

The combination of rising unemployment and falling EI receipts reduced the proportion of unemployed Canadians receiving benefits to 39.7 per cent in February (Read more…).e. 528,940 beneficiaries out of 1,332,600 unemployed workers). This reduction in EI coverage comes on the heels of new EI restrictions that make it harder for jobless Canadians to access benefits.

This morning, Statistics Canada reported flat wholesale trade and low inflation, providing further evidence of a subdued Canadian economy. Federal . . . → Read More: The Progressive Economics Forum: A Weak Week for Canada’s Economy