Finance committee  As time goes by, I am increasing my estimate of what that would be. I am not a forecaster, but what is relevant is the level of the Bank of Canada's overnight rate compared to inflation expectations. That's why I said earlier, if inflation expectations stayed down around 2%, then

Finance committee  My short answer is that every country that controls its own central bank is in charge of its own inflation rate, because it's a matter of supply and demand for money. The euro area has a common currency, so to some extent, they can say it's a bit of an international problem affec

Finance committee  It seems hard to absolve the Bank of Canada from responsibility. I would cut it some slack. As I said, I would cut the federal government some slack, because at the beginning of the pandemic, it wasn't clear how much liquidity was going to be enough. Under the circumstances, erri

Finance committee  The Bank of Canada needed to create liquidity in the short run because of the pandemic, but I have a lot of concern that they seem to be taking responsibility for long-term interest rates and not just the overnight rate they use for monetary policy. To that extent, I think they a

Finance committee  No, I was very supportive of many of those initial steps. In fact, on the wage subsidy, I was on the record as having said that the early proposals weren't strong enough to create that continued labour market attachment. I think many elements of that initial response to the pan

Finance committee  Yes.

Finance committee  Well, I personally would prefer to see the deficit disappear quite quickly. There was a reference earlier to what happened in 2008-09, and what I very much liked about what the federal government did after that episode was that it did, after having run a deficit much bigger than

Finance committee  I think there is no substitute for having a target on the bottom line. I would like to see that be zero when it comes to the amount borrowed, and that means, practically speaking, having a small surplus. My two main reasons for that are, first, that the debt-to-GDP ratio has not

Finance committee  What I didn't say in my testimony is that there is a protected class. MPs are actually part of it. You have indexed pensions. Federal employees have indexed pensions. Most people don't. So for people who don't have indexed pensions, a long period of high inflation is extraordinar

Finance committee  Yes, low interest rates certainly make it easier to borrow. With respect to the housing issue particularly, when interest rates get very low, the effect on asset values becomes noticeably non-linear. It's geometric. I think that it's very realistic to say that low interest rates

Finance committee  Thank you very much for the invitation to be with you. I hope my observations will be helpful to the committee in its work. I'd like to say, by way of background, that monetary policy and inflation have been central to my work at the C.D. Howe Institute since I was a much younge

Finance committee  The C.D. Howe Institute and I myself were at the forefront, early on, of urging some of the relief measures that we have seen. I am not critical of the CERB in principle. I am not critical of the CEWS in principle. I am not critical of many of the credit supports the government p

Finance committee  Chair, if I may advertise, we're missing Mr. Singh's presentation at the C.D. Howe Institute, but if you're interested in what Charles Goodhart has to say, you can tune in to that. We should have more parliamentarians at our meetings.

Finance committee  I wrote a piece in The Globe and Mail on this just this week, so perhaps I'll jump in. The answer to your question is very much dependent on what kind of time frame we're talking about. I think the central banks have had a tough time even hitting their inflation targets over the

Finance committee  If I may jump in, I'll say that in the short run, I think there is going to be upward pressure on interest rates, because the economy is reviving and governments are still borrowing a great deal, so you have competition in credit markets that is likely to raise interest rates.