MNI BRIEF: Canadians Fuzzy On How BOC Hikes Slow CPI, Government's Role
Canadians are unclear how higher interest rates cool inflation and some think the government influences monetary policy, polling done for the finance department shows, underlining questions about Bank of Canada communications as officials review pandemic-era actions.
"There is little understanding of how making many things more expensive by raising interest rates will make things cheaper in the long run," according to a summary of focus groups by Environics Research convened in late January, ahead of the federal budget. "Some people, particularly in Quebec, suspected that the federal government also has some influence on the Bank of Canada behind the scenes," said the report, recently posted to a government archive website.
"The Bank has taken several steps to continue to increase its transparency and communicate more clearly and more broadly with Canadians," BOC spokeswoman Amelie Ferron-Craig said in an email to MNI, pointing to several recent speeches. "The Bank of Canada also continues to listen to Canadians, and their perspectives feed into our decisions."
Finance Minister Chrystia Freeland's spokeswoman Katherine Cuplinskas said: "This federal government fully respects the independence of the Bank of Canada as it delivers on its mandate to return inflation to target."
A cost-of-living squeeze has become a big issue ahead of elections due next year and elected officials have debated the Bank's actions. (See: MNI: Canadians Doubt BOC Wins Inflation Fight-Internal Polls)