44th Parl. 1st Sess.
October 5, 2022 02:00PM
Mr. Speaker, it is my privilege this evening to speak to Bill C-253. I will try to summarize it for the people who are watching and listening. This is a bill designed to make the Bank of Canada, that is, the central bank, accountable to the Office of the Auditor General. It is no surprise that the Bloc Québécois is opposed to this bill. I will explain why.
As we know, the bill introduced by the Conservative member for Regina—Qu'Appelle talks a lot about inflation. They want to find the villains who are responsible for inflation. I am going to talk about who, or rather what, is responsible for inflation. I will also propose concrete solutions.
What we need to understand about Bill C‑253 is that there are already accountability mechanisms in the Bank of Canada Act, and asking the Auditor General to do it is not the right way to go about it, precisely because the Bank of Canada must remain independent of any political influence. Also, of course, there is the fact that we must not interfere in monetary policy, despite what some of our colleagues would like.
Let us look at the accountability mechanisms in the Bank of Canada Act. The bank is required to be accountable. Once a year, two independent firms must audit the bank's affairs simultaneously. That is one example. The Bank of Canada is the only federal Crown corporation subject to this requirement.
To ensure that this accountability is in place, the act subjects the bank to oversight by virtue of which the Minister of Finance can also request special audits and reports. As we can see, there are already mechanisms in place.
Furthermore, the Office of the Auditor General is already authorized to exercise an oversight role in certain areas of the bank's business functions. It may review and audit the bank's operations and records, because the bank serves as the government's fiscal agent, advisor on public debt management and manager of the exchange fund account.
Given the mechanisms I just cited, it is not clear how the Conservative Party's proposal would add actual value to the current situation.
Let us now reflect on the Conservative Party's position in introducing this bill. Its position is disturbing. Beyond the legislative changes themselves, this bill is part of a broader ideological agenda on the part of the Conservative Party to question the competence of the Bank of Canada and to undermine public confidence in it.
I will go even further. The Conservative Party's approach is troubling and very dangerous. Of course, the Bank of Canada is a complex, even abstract, institution for the general public. Understanding its role, its responsibilities, the decisions it makes and everything that entails is not necessarily within the grasp of even those with a keen interest in economics. This makes it the perfect bogeyman for many politicians looking for an easy target to blame for the current economic climate and the record surge in inflation these past few years.
That much is quite clear. The new leader of the Conservative Party and member for Carleton said during the leadership race that he was even prepared to fire the current head of the central bank, in other words, the governor.
It is unbelievable that the leader of the official opposition said that. I think he did not look too far for his inspiration. I suspect he copied this formula from a certain neighbour to the south.
If the Prime Minister were to fire the governor of the central bank because he did not agree with his monetary policy or because he needed someone to blame for the current inflation crisis, that would seriously undermine the independence of this institution, which is one of Canada's fundamental institutions.
It would also be an irrational, even impulsive act that could have devastating consequences for Canada's international image, its stability and also its ability to attract foreign investors.
We can all agree that firing the governor of the central bank is an idea that we cannot really take seriously. We can understand the desire to identify those responsible for certain crises, but firing the governor of the Bank of Canada will not solve the inflation crisis.
I am not saying that we must refrain from criticizing the role of the central bank. What I am saying is that although the governor's decisions can be questioned, it is irresponsible to go so far as to dispute the economic situation or inflation.
We note that, in the past few years, the Bank of Canada still achieved good results. Yes, I think it is okay to question the role of the Bank of Canada. That said, in 1991, the Bank of Canada set a target in order to limit inflation. Since then, it has always managed to keep inflation within a range of 1% to 3%.
It is okay to question whether the central bank's monetary policy will allow us to tame inflation for Quebeckers and Canadians. It is also reasonable to question whether the government used the central bank as an overly generous ATM because of the pandemic. However, we must take the time to put things into context and consider the big picture. We must, of course, avoid intellectual shortcuts, and avoid critics who take intellectual shortcuts.
Everyone would also agree that it is a question of intellectual rigour and honesty towards our constituents. We must go beyond simplistic discourse. I will put things in perspective in order to explain the cause of today's inflation. I would say that the vast majority of the factors that influence inflation are beyond the central bank's control. I would say that nearly 70% of the external drivers of inflation are not necessarily related to what can be controlled here in Canada.
I am thinking of factors, other than monetary policy, over which the Bank of Canada has no control. These include supply chains, which are in shambles because of the COVID-19 pandemic, and the war in Ukraine. These factors have exacerbated inflationary pressures because of the impact they have had on the grain and fuel markets.
The central bank is one of the most respected central banks in the world. It has a reputation. The inflation that we are experiencing in Canada is not unique to our economy; it is being felt in all OECD countries.
Again, it is okay to criticize the central bank and its governor, but it is very dangerous and counterproductive to draft legislation containing language designed to attack the very legitimacy of the institution. That is what the Conservatives are trying to do through Bill C‑253, which seems to be fuelling incendiary rhetoric.
The Bloc Québécois will not play along, and that is why we are voting against this bill.
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Mr. Speaker, in all seriousness, I am pleased to be standing here today for a very serious issue, which of course is Bill C-253. This act would give the Auditor General the authority, in the normal auditing cycle, to audit the Bank of Canada.
Before we get into the role of the Bank of Canada, how important this legislation is and indeed how important the Bank of Canada is, it is important to understand a bit of the context between the economy and the government. The first principle of any discussion of the economy in a political context is that productivity comes from our workers and business owners. In other words, the goods that are produced and the services that are delivered come from the private sector. When workers are more productive and when we are able to deliver services more efficiently and more effectively, by necessity the wealth of the country increases.
Monetary policy is, unfortunately, something our Prime Minister does not think about and perhaps should, given that we are in one of the worst monetary crises of the last 40 years. A little forethought on monetary policy would have perhaps been helpful, since, when we look at what monetary policy can do to an economy, we see that it can give it an artificial, temporary high.
When the Bank of Canada prints money or uses, as we call it, quantitative easing to fund the spending of a government, as with any country and any central bank, there is an initial exuberance as citizens see the money come into their bank accounts. However, that exuberance is, in fact, always replaced by a sense of extreme disillusionment as their bank accounts swell but they realize quickly that the cost of everything has increased. The troubling part about inflation is that it can be a self-perpetuating phenomenon, meaning that if we believe there is inflation, there is inflation. That inflation can linger on for many, many years after the money has been printed.
The true path to improving Canada's economy is through increasing productivity. It is the only real cure for the affordability crisis because it actually increases consumers' abilities to purchase. It also increases the power of their wages, increases the power of their pensions, creates jobs and, dare I say, as I know my friends in the NDP will cringe, increases profits. These are profits that can be invested back into the Canadian economy. They would take us away from where we are right now, which is last in the OECD in capital investment, and would allow our economy to grow and for our future generations to be prosperous.
However, while monetary policy at its best can push off bad things and perhaps give us a temporary high, monetary policy done wrong can have serious consequences. I will go through four of the Bank of Canada's responsibilities, but traditionally its mandate, at least up until the last two years, has been to be a bulwark against inflation, because inflation can have extreme and corrosive impacts not just on the economy but on the fabric of society. Many revolutions and civil disruptions have been created in the last 150 years to 200 years, and even before, because of rapid increases in inflation. Inflation is a really serious issue that affects people.
The Bank of Canada has four primary mandates. One is supply of money. Its job is to keep the money circulating through the economy. The second is to promote “safe, sound and efficient financial systems”. Third is to design the dollars, notes and coins we all use. Fourth is to be the fiscal agent of the government, which means there is a necessary connection there, because the more debt the government has, the more it needs to print. While there can be little doubt that there should be some independence, in part there is a connection, and there are no two ways about that, between the government that spends the money and the bank that funds the spending. That connection is there.
For years, the leader of the official opposition has tried to put people first by raising opposition to and concern over the fact that the government kept spending money and the Bank of Canada kept printing money through quantitative easing to fund extreme expenditures. He said early on that we would face inflation, and guess what. He was right.
The Deputy Prime Minister and Minister of Finance of the government said there would not be inflation. She said, believe it or not, that there would be deflation and that this should be our primary concern. That is zero to 10 on a math test.
Who else said that? It was Tiff Macklem, the Governor of the Bank of Canada. At first he said there was no inflation. Then he said there was a little inflation. Then he said there was more than a little but it was just transitory, and then it was actually a lot of inflation but it was really just transitory. Now he says there is a lot of inflation and it is going to be with us for a while. There was one individual who was in this House of Commons publicly ringing the bell about the concerns of inflation, and that was the leader of our party. He should be celebrated. It is the Bank of Canada that got it wrong, not the leader of the official opposition.
I do not have to tell members about the real consequences that monetary policy has. We have seen tremendous pain. We have seen that 20% of Canadians have to change their diet and 20% more Canadians are going to food banks. This has real impacts. The need to have some type of oversight and accountability is incredibly important and urgent. We have seen a massive failure by the Bank of Canada. Its number one job and responsibility is to keep inflation under control, but we have food inflation at 11%, which will force children to go to bed hungry because the bank failed on a tremendous scale.
There has been lots of talk about different things that we are asking for. All we are asking for is that there be an audit by the Auditor General. That is not in any way compromising the independence of the Bank of Canada. It is just auditing.
Do members want proof? Look at the Public Service Investment Board. It is independent and has maintained its independence despite the fact that it is regularly audited by the Auditor General. It has been done and can be done. This is nothing new. We can certainly audit an organization. In fact, by definition, the auditor is independent; it is separate. There is no way that it is compromising the independence of the Bank of Canada. That argument is just silly. That is the only word for it.
The second argument I have heard against this legislation is that there are already auditors. There are different levels of auditing and different ways of auditing. Those audits are generally just looking at the numbers: Do the numbers make sense? Is the Governor of the Bank of Canada walking out with a briefcase of cash? No one believes that is an issue. I believe that the Bank of Canada can add and do its math and I am cool with that.
What the Auditor General does is it looks at the overall effectiveness of something. I had the great privilege of sitting on the public accounts committee and working with the Auditor General on her excellent work. She has raised the flag on a number of things that have spurred change. One is getting clean water to our indigenous communities. She had a great report condemning the government for its repeated failures.
To summarize, when we look at the issues, we have a significant failure by the Bank of Canada. All that Bill C-253, the great bill by the member for Regina—Qu'Appelle, is asking for is that we have accountability and transparency regarding an institution that has an impact on all 37 million-plus Canadians and can have a significant impact. We have seen it raise the cost of food and raise the cost of everything, making life harder. All we are asking for is accountability and transparency. Quite frankly, I am disappointed and very surprised that all members of the House will not support this bill, especially those from Quebec. Why they would not want additional accountability and transparency from the federal government seems strange.
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