Bank of Canada Governor Stephen Poloz’s story of the Canadian economy has been sent to rewrite. There are no sleeping beauties in the revised tale: if the factory in your community closed during the Great Recession, it is likely staying closed. (Although if it has exposed brick, some hipsters might come along and turn it into shared workspace.) If there was a Prince Charming who thought he could make money doing whatever that facility used to do, he probably would have shown up by now. It is time to move on.
Poloz, who, like every other economist, has struggled to explain our post-crisis reality, was in Toronto on November 28 to set the stage for the Bank of Canada’s last scheduled policy announcement of the year, on December 7. The governor went on television with Bloomberg’s Amanda Lang, he spoke at an event hosted by the C.D. Howe Institute, and he held a press conference. Poloz used these venues to tweak his narrative. When he was appointed three years ago, Poloz assumed non-energy exports and business investment would take over from household spending and housing as drivers of economic growth. That hasn’t happened to the extent the central bank thought it would. Officials have spent a lot of time this year trying to understand why their assumptions were off. It appears Canada suffered from a lack of champions; companies and entrepreneurs with the combination of guts and capital to make it in a tougher global economy. But if Poloz is right, the wait may be over. Canada’s heroes have arrived.
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