Lavish bonuses for Bank of Canada staff while Canadians struggle under inflation
‘When the government borrows hundreds of billions of dollars to fund a spending orgy, it competes with commercial and consumer borrowers for the same cash, thereby driving up interest rates.’
“Bonuses are for people who do a good job, not people who fail at their one and only job,” Franco Terrazzano, federal director of the Taxpayers Federation, said of the Bank of Canada, after his organization uncovered data that shows last year the bank paid $27 million in bonuses and raises to its employees, even as it badly misjudged how high and persistent inflation would be.
The bank’s job is to try to keep inflation under between one and three per cent annually, ideally under two per cent. Inflation hasn’t been under 2.0 per cent since February 2021. From January 2022 until February of this year, inflation was over 5.0 per cent — more than three percentage points higher than the bank’s ideal.
In June of last year, the rate hit an astonishing 8.1 per cent.
When Bank of Canada Governor Tiff Macklem was asked last year just how high he intends to raise rates, he shrugged off the question with a dismissive: “We recognize everyone wants to know where interest rates might end up … It’s important to remember we (the Bank of Canada) have an inflation target, not an interest rate target.”
It is as if Macklem doesn’t care what rising interest rates will do to ordinary Canadians’ housing payments, car loans, credit card balances and consumer prices in general. It doesn’t matter to him if interest hikes make mortgage payments unaffordable or help drive up grocery prices even further.
