Published on May 9, 2023 at 2:48 p.m
The central bank will announce its latest interest rate decision on Wednesday and most observers expect it to keep its key interest rate at current levels. (Photo: The Canadian Press)
Two provincial premiers have sent letters to Bank of Canada Governor Tiff Macklem urging the central bank to pause its rate hikes as it is scheduled to announce its latest decision on the issue on Wednesday.
Ontario Premier Doug Ford sent a letter Sunday saying families and businesses cannot afford the “devastating impact of further rate hikes,” echoing a letter from British Columbia Premier David Eby on Thursday.
Christopher Ragan, associate professor and founding director of the Max Bell School of Public Policy at McGill University, said it was “unfortunate” that prime ministers found sending these letters useful.
Mr Ragan says this brings a political element to monetary policy decisions, which should be made independently of the government.
The Bank of Canada is an independent institution mandated by the federal government and responsible for maintaining an annual inflation target of 2%.
The central bank will announce its latest interest rate decision on Wednesday and most observers expect it to keep its key interest rate at current levels as the economy shows signs of weakness under the weight of rising interest rates.
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