Canada’s monetary policy regime works fine, by most accounts, but it’s not as credible as it could be. For example, in 2016, Stephen Poloz’s Bank of Canada and Bill Morneau’s Finance Department, after very little public discussion, decided to re-up the existing approach and lock in the two-per-cent inflation target for another five years. It was akin to a budget speech at midnight.
Democracies aren’t supposed to work that way. Don’t blame the technocrats; they were just doing their jobs. Those of us who make a living off the democratic ideal — cabinet, legislators, academics, reporters — were asleep at the switch. Most of the electorate probably had no idea monetary policy was even up for discussion.
Continue reading at the Financial Post ...