Stephen Poloz gets racier as his farewell tour progresses: Don Pittis
Bank governor warns on Trump re-election and slams premiers on internal trade
In her mid-50s, the singer Cher kicked off Living Proof: The Farewell Tour in Toronto back in June of 2002. It was a long farewell. Now in her 70s, the performer still takes to the stage, and her shows are racier than ever.
It's not clear whether Bank of Canada governor Stephen Poloz would have Cher's stamina, but at least his long goodbye — which continued with a speech and news conference in Vancouver yesterday — has a deadline.
Perhaps a little like the singer of Gypsies Tramps and Thieves, as he counts down the months toward his June departure, the country's top central banker is getting saucier.
Racy (for a central banker)
Of course everything is relative. The latest outing by Poloz, who has often been forthright, could only be considered racy by the standards of a staid central banker.
But with comments that warned of the impact of a new Donald Trump presidency in the U.S., heaped opprobrium on Canadian premiers for absurd trade barriers and noted the dangers of an explosion of uncertainty and flawed statistics, perhaps the governor senses a lightening of the yoke of decorum as the end of his term approaches.
Some of the Canadian central banker's most revealing remarks came in his "fireside chat" with Bridgitte Anderson, CEO of the Greater Vancouver Board of Trade, who congratulated Poloz for what has so far been a successful seven years. Such recognition at each recent public appearance adds to the farewell tour feeling.
In fact, Poloz maintained that not only has the economy improved on his watch but that it continues to do very well, and that's despite a period of global uncertainty of the type that has led to this week's crash of a Ukrainian passenger aircraft in Iran that killed all 176 people on board.
He said uncertainty, especially over trade, has knocked a full percentage point off global economic growth that has gone for good.
Trump and exploding uncertainty
Effectively, he said, uncertainty during the Trump administration has "exploded higher," making companies reluctant to spend and invest. And Poloz said that uncertainty is not over yet.
"You know, if President Trump were re-elected, I don't think he would suddenly change the tools of how he operates, so I think we would be in for continued uncertainty," he told Anderson in response to a question about the effects on Canada of the coming U.S. election.
That said, he conceded that a vote against Trump could lead to uncertainty of a different kind, a seeming nod to the more left-leaning politicians who could win the Democratic Party nomination.
The startling thing about the Canadian economy, said Poloz, is that it has done so well. While he worries about the effect of a sudden downturn on consumers made vulnerable by too much borrowing, there are growing signs that foreign and domestic businesses are investing in the economy.
But the country could do much better if the premiers would just get together and get rid of trade barriers and red tape within Canada that research shows have cut four percentage points off Canadian economic growth.
Toilet seat protectionism
"Take for example, in one province the construction worker's toilet seat must be an open front toilet seat, in another province it must be a closed front toilet seat. Seriously!"
Fixing issues like that rather than making more cuts in interest rates would have a greater effect on Canadian productivity.
And when it comes to measuring items like productivity Poloz insists there are increasing signs that Canada's statistical methods are flawed and out of date.
"As far as I can tell there's high productivity everywhere in Canada except in the statistics," he quipped. Some studies have shown what he called a missing two per cent in productivity readings.
The Canadian economy is changing and has grown quite different from the United States, said Poloz, and Canada's statistics have not caught up. While manufacturing and resource extraction remain important to the economy, information technology services in Canada's increasingly knowledge-based economy are bigger and growing at eight per cent per annum.
While describing Statistics Canada as "the best statistics agency in the world," he says they need to be properly funded to keep up.
Despite repeated calls for rate cuts to boost the economy, the governor's intransigence in the face of repeated advice has so far proved correct. But there is still time for things to go wrong before the central banker's final exit.
Canadian singer and songwriter Neil Young who, like Cher, has about a decade on Poloz, takes a different view on farewell tours.
"When I retire, people will know, because I'll be dead," he's reported to have said.
Yesterday Poloz said that while he is stepping down as a central banker, he's not retiring. His wife, he says, wants him out of the house.
But unlike performers like Young or Cher, the real test of success for someone like Poloz will be, once he his has stepped down from his current job and the road show is really over, whether the machinery of the Bank of Canada keeps working just as smoothly in his absence.
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