Senator Accuses Poloz of Straying From Mandate to Back Trudeau
(Bloomberg) -- Stephen Poloz was accused by a senator of “straying too far” from his mandate by endorsing the policies of Prime Minister Justin Trudeau -- an accusation the Bank of Canada governor said he firmly rejected.
Senator David Tkachuk, a lawmaker from the opposition Conservatives, cited comments Poloz made in a speech last month about the effects of child-care policy on labor force participation. He also said Poloz has been “heard to endorse” deficit spending and infrastructure spending.
“As far as I know governor, your job is inflation-targeting, monetary policy,” Tkachuk said during a Senate hearing Wednesday in Ottawa. “People have to have confidence that you’re an independent governor, and I think you may be straying a little bit beyond your mandate with these statements and creating a perception that you’re a little too close to the government in power.” He later said, for emphasis: “I think you are straying too far.”
The question drew a curt exchange between the two before Poloz responded by defending his comments as, essentially, a neutral study of things that affect the economy and twice saying it would be “bizarre” to ignore them. “Of course, the media is free to interpret them as endorsements if they choose. As you can tell, I reject that interpretation, very firmly actually -- because I’m very careful not to.”
The speech Tkachuk cited focused on the labor market. Poloz said the province of Quebec increased its labor force participation rate for women by adopting policies such as lower-cost child care. “If we could simply bring the participation rate of prime-age women in the rest of Canada up to the level in Quebec, we could add almost 300,000 people to our country’s workforce. The recent Federal Budget introduced some new measures in this direction,” Poloz said.
The Bank of Canada governor defended those comments again in response to the senator’s question. “If we had a similar sort of participation across the country, it would be another 300,000 jobs,” he said Wednesday. “That’s like two years worth of growth out of literally thin air.”
Poloz said infrastructure spending is “still having an impact on the economy” and that the bank will study issues affecting the economy. “It’s not an endorsement, it is a comment on exactly what we think,” he said.
Tkachuk also quoted a National Post column, where author Terence Corcoran accused Poloz of enabling big-spending governments. “From Ottawa’s deficits to Ontario’s childcare plan to big pension spending on infrastructure, politicians can now turn to Poloz as an independent authority for approval,” Corcoran wrote, in a passage cited by Tkachuk.
“I hope that you’ll listen to what we say to you and not what Terry Corcoran says to you,” Poloz told Tkachuk.
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