After the Bank of Canada’s interest rate decision on Sept. 6, Finance Minister Chrystia Freeland took the unusual step of issuing a statement about the announcement.
The decision to hold interest rates steady after 10 increases was a “welcome relief for Canadians,” Ms. Freeland said, disregarding the norm that federal finance ministers don’t comment on central bank decisions. She added that she would use “all the tools” at her disposal “to ensure that interest rates can come down as soon as possible.”
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Ottawa isn’t alone in its newfound fervour. The premiers of Ontario, British Columbia and Newfoundland and Labrador each wrote to the Bank of Canada ahead of the rate announcement urging it not to raise interest rates. And several provinces followed the federal government’s lead this week, agreeing to cut provincial sales taxes on rental-home construction.
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My comment: This politicization of monetary policy is risky. Very risky.
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