An eminent Canadian economics professor says Pierre Poilievre’s desire for a freer Canada is good, but his monetary policies are less credible..In an interview, Steve Ambler, an economics professor at the University of Quebec at Montreal, said he likes what Poilievre wants to do, but not how he’s proposing to do it. .“Given what we've lived through with the Emergency Measures Act and everything else, [Poilievre] saying, ‘I want to make Canada the most free country in the world' — even if it's vague, that resonates with me. But the stuff on monetary policy? Meh.”.Poilievre’s promise on May 11 to fire Bank of Canada Governor Tiff Macklem was only the latest problematic monetary policy, according to Ambler..“I found the threat somewhat ironic. He has strongly hinted that the Bank has been taking marching orders from the government by ‘acting as the government's ATM machine’…He then claimed to be able to solve the problem of a lack of independence by ... directly interfering in the Bank's affairs by firing the governor,” Ambler said..“He's quoted as saying ‘I would replace him with a new governor who would reinstate our low-inflation mandate ...’ But the Bank's mandate was just renewed last November, with no change in the 2% target.”.Ambler says an examination of the role of the Bank in the heavy deficits of the Liberal COVID response is more nuanced than most politicians would explain..“What's happening with monetary policy in Canada is complicated, and there's all sorts of weird technical things going on. And if you want to try and get the votes, you can't explain all of this stuff,” Ambler said..“The Bank may have made a mistake by buying as much federal government debt as it did. [It was] not needed to stabilize financial markets and not very effective in lowering longer-term yields. But ‘more cash’ was in the form of settlement balances, and was not ‘chasing fewer goods’. It was mostly just sitting there on the books of financial institutions.”.Ambler says the Bank has "done overall pretty well” in maintaining its inflation targets for the past 30 years. He believes the Bank’s power would be compromised if it is barred from adopting a digital currency, as Poilievre promised to do on April 28..“The problem is that if a private currency that was not denominated in Canadian dollars, but offered all sorts of advantages, if it really caught on, Canadians would start holding their liquid assets in that form. The demand for Canadian dollars would drop. And in terms of being able to conduct an independent monetary policy, the Bank of Canada would be kind of out of a job,” Ambler said..“Some people might actually think that that would be a good thing. I don't know if [Poilievre is] trying to imitate, or even channel Ron Paul. He as well as has said we have to audit the [Federal Reserve Bank] and even goes as far as abolishing the Fed. So it depends whether you think that the bank has done an okay job in maintaining low and stable inflation.”.In his 2009 book End the Fed then-Senator Paul said the U.S. central bank should be abolished "because it is immoral, unconstitutional, impractical, promotes bad economics, and undermines liberty." Paul argued that the inflation and devaluation made by central bank policies benefitted a few in the private sector, but undermined the purchasing power of most Americans. He also argued for a return to the gold standard..Poilievre has also called for an audit of Canada’s central bank. He made the announcement April 28 as he stood beside MP Andrew Scheer. Scheer’s bill C-253 would amend the clause that prevents the Auditor General from being able to audit the Bank of Canada. .A performance audit of the Bank’s practices during the pandemic is precisely what Poilievre and Scheer want to see. But Ambler wonders what they would find..“Maybe I could get a job with the Auditor General, they'd hire me as a monetary policy expert. But, barring that, I don't see why they would have any particular expertise,” Ambler said..“I think Scheer and Poilievre should be calling out the real culprit, profligate fiscal policy by the Liberals.”.Lee Harding is a Western Standard contributor from Saskatchewan.
