Stephen Poloz – Governor of the Bank of Canada, recently spoke with Bloomberg News about Canada’s economy. As head of our central bank, Poloz is one of the most influential people in the country, though he generally operates behind the scenes.
Here are some of his most relevant comments:
A more risky world
Poloz seems to acknowledge that the world is more risky, saying, “I certainly know that geopolitical risk is a term you hear more.” It was something you would hear around oil markets but now “it’s used more often and in a broader context. As forecasters we need to be mindful of an extra layer of risk than in the past.”
Supports foreign buyers tax in Ontario
Poloz is pleased with the new foreign homebuyers tax in Ontario, part of measures (too little too late in my opinion), to stem the massive inflow of foreign speculators in Canada’s housing market. Says Poloz, “I’m happy there are measures. It’s a risk we’ve been highlighting and made it clear a week or two ago we didn’t think interest rates are the right tool for managing such a risk because they affect everybody. They are not localized.”
Growth projections a reaction to “serial disappointment”
Interestingly, Poloz casts increased global growth projections as people realizing forecasts would be down for some time. Said Poloz, “at some point forecasters begin to say, ‘Gosh I guess that’s a long term trend or something.’ So, they begin to embody that. They are Bayesian in a sense. So the positive surprise at some point is inevitable.”
The comments by Poloz point to a world that is clearly still struggling economically, something we have seen in Canada as our economy remains stagnant. It should be noted that while the Trudeau government has tried to take credit for “economic growth,” Poloz has not raised interest rates – a sign he still sees the economy as week.
Additionally, the Bank of Canada is said to be concerned about low wage growth – the weakest under Trudeau in 20 years. That’s why, when we hear the propaganda coming from the Trudeau government, it’s essential to look for more level-headed sources.
Photo – YouTube screenshot – Bank of Canada