Last month Deputy Governor Gravelle described the bank’s 1% overnight rate as “too stimulative” and the same could be said of today’s 1.5%. Indeed, the policy statement noted that with the economy in excess demand and inflation well above target and still yet to peak, “interest rates will need to rise further.” It finished by saying the bank is “prepared to act more forcefully if needed”—that’s not new language for the BoC but it’s new to the policy statement. Source - https://ca.rbcwealthmanagement.com/103.branch/blog/3368558-Bank-of-Canada-hikes-interest-rates-another-50-bps-and-isnt-done-yet

1. WHAT IS MONETARY
POLICY AND WHY IS
IT IMPORTANT TO
GOVERNMENT
Paul Young CPA CGA
June 2, 2022

2. PAUL YOUNG - BIO
• CPA, CGA
• Academia (PF1, FA4, FN2, MU1. and MS2)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Emerging Technology
• SME – Business Process Change
• SME – Financial Solutions
• SME – Macro/Micro Indicators
• SME – Supply Chain Management
• SME – Data, AI, Security, and Platform
• SME – Internal Controls and Auditing
Contact information email: Paul_Young_CGA@hotmail.com
LinkedIn: https://www.linkedin.com/in/paul-young-055632b/
SlideShare - https://www.slideshare.net/paulyoungcga
Twitter: https://twitter.com/paulyoungcpa
Youtube - https://www.youtube.com/user/youngercga1968/videos

3. AGENDA
• What is monetary policies?
• GDP Growth
• Canada and Inflation
• Canada and Producer Price
• Housing
• Cost of Living
• Household Debt
• GDP
• Fiscal Management
• Innovation
• Productivity and Competitiveness

4. WHAT IS MONETARY POLICY
Source - https://www.investopedia.com/terms/m/monetarypolicy.asp

5. BANK OF CANADA / MONETARY POLICIES
• There are issues with GDP: a) Productivity b) FDI
outflow c) Lack of innovation d) Higher
Commodities e) government deficits and taxes
• About 40% of the job vacancies are with jobs that
pay less than the average wage
• Size of household debt continues to be an issue
• Lack of affordable housing options
• Global Trade and protectionism
Source - https://www.slideshare.net/paulyoungcga/bmo-
7-reasons-to-be-exciting-about-the-canadian-economy
My concerns with the BOC saying inflation dropping from 5.3% in 2022 to 2018 is not realistic and here is why:
• Liberals plan hikes to carbon tax - https://nationalpost.com/news/politics/federal-carbon-tax-to-increase-to-170-per-tonne-
by-2030-as-liberals-unveil-new-climate-plan
• Critical metals have risk due to supply and refinement capacity issues. https://oilprice.com/Latest-Energy-News/World-
News/America-Desperately-Needs-To-Scale-Up-Battery-Metal-Production.html
• Huge capital needs to be spent on areas like the electrical grid and plug-in stations (electrical vehicle adoption)
• Housing issues will continue to plague the cost of housing – https://www.slideshare.net/paulyoungcga/housing-and-
homelessness-canada-and-the-world-budget-2022-pptx
• Automation will also play a key role with organizations managing their costs -
https://www.slideshare.net/paulyoungcga/what-is-next-for-automation
My work - https://www.slideshare.net/paulyoungcga/preliminary-cost-of-living-canada-february-2022pptx

6. GDP GROWTH
Forecast_BNS_202214
04.pdf
This gives you a good look at how @cafreeland deficits
did nothing for GDP growth. One can make the argument
is Trudeau's policies handcuff the goods-producing sector!
16 https://www.slideshare.net/paulyoungcga/2016-
november-2016-gdp-gross-domestic-product-canada
18 https://www.slideshare.net/paulyoungcga/gdp-canada-
the-real-truth
Jan/22 - https://www.slideshare.net/paulyoungcga/gdp-
analysis-and-commentary-canada-january-2022pptx

7. KEY MONETARY AREAS

8. INTEREST RATES
April 2022 Bank of
Canada Interest Rate Update - Tridac Mortgage.pdf

9. OECD AND INFLATION

10. SUMMARY - INFLATION

11. BMO – CONSUMER PRICE INDEX
Source -
https://economics.bmo.com/en/publications/detail/
d0fee10a-93f7-4a89-957e-6e235056f623/
Source – BMO - https://economics.bmo.com/en/publications/detail/31f5c274-1ed1-4698-
b167-9a99495fb4c8/
U.S. CPI The Core Is
No Bore.pdf
Canadian CPI Who'll
Stop the Rain .pdf

12. INDUSTRIAL PRODUCE PRICE INDEX Raw Materials and
Purchase Price Index.pdf
In April, the Industrial Product Price Index (IPPI) rose 0.8% month over month and 16.4% year over year. The
monthly increase was mainly due to higher prices for energy and petroleum products (+5.2%). Excluding energy
and petroleum products, the IPPI edged up 0.1%. https://www150.statcan.gc.ca/n1/daily-
quotidien/220519/dq220519b-eng.htm

13. INFLATION
TRENDS BY
MANDATE

14. AVERAGE HOUSING PRICE INCLUDING KEY
CITIES
https://twitter.com/TomPark1n/status/1516820865664667657
@TomPark1n
This explains why REIT are not touch!
This does not explain the high cost of land, raw material, lack of 3D
adoption, lack of rural vs urban strategy, and other systemic issues
with housing!
https://www.slideshare.net/paulyoungcga/housing-and-
homelessness-canada-and-the-world-march-2022-revisedpptx
MPs with Rental Properties

15. HOUSEHOLD DEBT
RBC and Household
Debt.pdf

16. DEBT LEVELS
AND
CANADIANS
Source -
https://mnpdebt.ca/en/reso
urces/mnp-consumer-debt-
index

17. BOC
CONCERNS
https://www.bankofcanada.ca/2
019/12/big-issues-ahead-the-
banks-2020-vision/

18. INNOVATION
Summary:
Justin Trudeau told the world in 2015 that Canada should be know for its resourcefulness not its resources -
https://www.macleans.ca/news/canada/what-justin-trudeau-plans-to-tell-davos/
Trudeau and his government focus has been setting up more and more agencies to manage innovation funds. Many of
these agencies have liberal running them - https://financialpost.com/technology/liberals-supercluster-program-falling-
short-of-promised-jobs-economic-growth and https://www.slideshare.net/paulyoungcga/policy-review-innovation-
and-scientific-research-rd-canada
The goods-producing sector since Trudeau took office or about 6% of all the net new jobs.
https://torontosun.com/opinion/columnists/gunter-the-public-sector-fared-very-well-during-lockdown or
https://www.slideshare.net/paulyoungcga/employment-and-labour-market-canada-january-2022
I have also been saying for years that all colleges and universities should be innovation. The role of government is support
innovation through proper policies and not throw money at the symptoms!

19. PRODUCTIVITY
Did article did not age well - https://www.cbc.ca/news/politics/canada-election-2015-liberals-infrastructure-
deficits-1.3205535
Our economy needs investment to create growth," he said. "Our plan features three years of historic
investment in the Canadian economy. That growth will eliminate the Harper deficit and we will balance the
budget in 2019," This never happen under @JustinTrudeau
Yet Productivity has not improved - https://financialpost.com/opinion/opinion-bigger-post-covid-government-
may-mean-slower-productivity-growth-and-lower-incomes
Broken Promises - https://thetyee.ca/Opinion/2015/09/15/Liberals-Broken-Promises/
Records - https://www.progressive-economics.ca/2015/10/fiscal-and-economic-record-of-political-parties/
Here is my work on productivity - https://www.slideshare.net/paulyoungcga/how-to-improve-canada-global-
competitiveness-250054392

20. DID JUSTIN TRUDEAU HAVE THE
ANSWERS FOR GDP
• Justin Trudeau took an economy growing at 2.3% (Post-2009 recession to annual growth on average of 2.1%.
Trudeau seen GDP go from 3.0 in 2017 to 1.6 in 2019.
• Trudeau deficits did little to address systemic issues with the economy, i.e., productivity, building a resilient
supply chain, reducing gridlock, addressing issues with household debt.
• BOC buying government bonds - https://www.bnnbloomberg.ca/bank-of-canada-already-pushing-limits-of-
domestic-bond-market-1.1513097
• Canada economy - Blog – GDP – Canada by Industry – May 2021 -
https://www.slideshare.net/paulyoungcga/gdp-canada-naics-may-2021
• Canada economy – 2019 - https://www.slideshare.net/paulyoungcga/2019-election-world-economy-slow-
growth-canada-july-2019
• Trudeaunomics continues to be a failure - https://www.slideshare.net/paulyoungcga/has-trudeuaomics-been-
successful-for-canadians
• GDP – 2021 Despite all the deficits the economy continues to face major headways for the rest of 2021. It
goes to show Canadians that economies do not grow from the heart as @JustinTrudeau predicted a few
years ago! https://www.slideshare.net/paulyoungcga/gdp-canada-analysis-and-commentary-june-2021

21. GOVERNMENT AND MONETARY
POLICIES
• The government needs to grasp the BOC policies as part of any fiscal management cycle. Trudeau has since
day one increase the budget deficit without addressing key areas impacting supply chain and the
affordability of housing. Trudeau carbon tax had an impact on inflation.
https://www.investopedia.com/ask/answers/100314/whats-difference-between-monetary-policy-and-fiscal-
policy.asp
• Inflation is now at 3.7% which is a concern of the BOC - https://www.bankofcanada.ca/2016/10/renewal-of-
the-inflation-control-target-2016/

22. BOC – INFLATION AND HOUSING
BUBBLE
Tiff Macklem faced some tough questioning yesterday, as members of the
U.S. Council on Foreign Relations grilled the Bank of Canada governor on
whether their northern neighbour would have a trouble-free exit from the
downturn of the COVID-19 pandemic.
Led by financier and former Democratic politician Roger Altman, members of
the U.S. think-tank asked probing questions on whether Canada's housing
bubble would have any spillover effects on the global economy, as well as
on jobs, inflation, commodity pricing and the difficulty of moving from a low
interest rate regime to one without monetary stimulus.
To Canadians who have heard Macklem's views in the past, the answers
were in some ways less revealing than the questions. But among the new
things he did pass on were fears that inflation could well turn out to be more
long-lasting than expected and jobs recovery could be slower.
https://www.cbc.ca/news/business/boc-us-
concerns-column-don-pittis-
1.6203452?__vfz=medium%3Dsharebar
I am very concerned about these kinds of
messaging from BOC. There are structural issues
facing the economy like low productivity, high
taxes, excessive regulations, and
inefficient/ineffective government.
https://www.slideshare.net/paulyoungcga/what-is-
the-path-forward-for-canada-october-2021

23. FISCAL MANAGEMENT
Source - https://www.theglobeandmail.com/politics/article-
michael-sabia-was-greeted-as-a-game-changer-as-canadas-
deputy-
finance/?utm_medium=Referrer:+Social+Network+/+Media&ut
m_campaign=Shared+Web+Article+Links
• YTD Nov/15 there was 1B surplus (per the fiscal
monitor) that was turned into 987M deficit within a
few months of Justin Trudeau leadership
• Trudeau has spent well over $6B (3B in 2020) on
consultants -
https://nationalpost.com/news/politics/costs-for-
consultants-hired-by-government-rise-by-6-billion-
under-liberals
• Trudeau GDP growth went from 3% in to 2017 to
1.4% in 2019. The economy had been sluggish two
years prior to COVID19 -
https://www.slideshare.net/paulyoungcga/slow-
economic-growth-canada-march-2020
• Trudeau spending grew faster than revenues despite
strong revenues -
https://www.slideshare.net/paulyoungcga/fiscal-
management-public-sector-canada-250734309

24. FISCAL MANAGEMENT CYCLE
• Trudeau has spent billions on consultants
• Trudeau refuses to release his economic impact study on the carbon tax
• Australia has done a better job of getting goods out of the ground to
market
• Trudeau’s policies never addressed issues with productivity and
innovation.
• Trudeau increased taxes to the middle class
• Trudeau policies have done little to support FDI
• Pre-COVID19 Deficits were between 12B to $15B and yet growth was
less than the average post 2009 recession
• Trudeau continues to ignore AG, PBO, ethics, and other reports
• Trudeau took $1B surplus YTD Nov/15 to 987M deficit in four months.
Trudeau was never about value for money including improving
outcomes.
Source - https://www.slideshare.net/paulyoungcga/failure-of-
trudeaunomics-january-2022

25. SUMMARY
• I have always supported balance policies between protecting the environment while growing the economy in a sustainable way.
• I also support social welfare as long as those payments are targeted at those that need the support.
• Bank of Canada has renewed the 2% interest rate target. The problem is that there are structural issues with the economy that need
to be address if inflation can be brought down to the 2% range from 4.7% range.
• Housing needs concrete solutions including new urban planning strategy, adoption of 3D housing and other innovations as part
delivering affordable housing solutions.
• All levels of government need to work together to address issues with productivity, innovation, and skills gap
• All levels of government need to revisit their fiscal management cycle to ensure assets are safeguarding and program spending is
delivered with value for money,
• All levels of government need to undertake compensation and tax reforms as part of better managing both their costs and taxation
base.
Blog – Monetary Policies – Canada – June 2022
Canada Prime Rate
History (1935 - June 2022) WOWA.ca.pdf
Poll Housing
affordability still nowhere in sight in Canada Canadian Mortgage Professional.pdf
Canada Housing
Boom to Halt Next Year.pdf
Half of Canadians
Think Homeownership is Impossible CPA Canada.pdf
02000-SC-CanadasTa
xSystem_Paper_EN.pdf
Business Council of
British Columbia Canada’s productivity….pdf
Breaking Canada’s
innovation inertia.pdf
How to redefine
Canadian innovation in an 'unforgiving world'.pdf
The 2022 Kearney
Foreign Direct Investment Confidence Index® Optimism dashed - Kearney.pdf
Biotech could liberate
billions from Sudbury's mine waste - Sudbury News.pdf
Guest opinion Policy
uncertainty remains major barrier to mining investment in Canada Calgary Sun.pdf
Harris unveils White
House plan to tackle water scarcity as national security priority.pdf
Gas prices fueling
food costs – farmers react to the higher price of food production 94.1 St.ThomasToday.ca.pdf
BDC survey indicates
growing digital divide among Canadian businesses - BNN Bloomberg.pdf
Your Financial Future
Higher prices likely here to stay Business observer-reporter.com.pdf
Summary:
Last month Deputy Governor Gravelle described the bank’s 1% overnight rate as “too stimulative” and
the same could be said of today’s 1.5%. Indeed, the policy statement noted that with the economy in
excess demand and inflation well above target and still yet to peak, “interest rates will need to rise
further.” It finished by saying the bank is “prepared to act more forcefully if needed”—that’s not new
language for the BoC but it’s new to the policy statement.
Source - https://ca.rbcwealthmanagement.com/103.branch/blog/3368558-Bank-of-Canada-hikes-
interest-rates-another-50-bps-and-isnt-done-yet
1. Housing costs - https://www.mpamag.com/ca/mortgage-industry/market-updates/poll-
housing-affordability-still-nowhere-in-sight-in-canada/408081
2. Affordability – https://storeys.com/half-of-canadians-think-homeownership-impossible-survey/
3. Fixing the tax system
4. Productivity - https://bcbc.com/insights-and-opinions/canadas-productivity-performance-over-
the-past-20-years
5. Innovation - https://policyoptions.irpp.org/magazines/may-2022/breaking-canadas-innovation-
inertia/ and https://thoughtleadership.rbc.com/how-to-redefine-canadian-innovation-in-an-
unforgiving-world/
6. FDI - https://www.kearney.com/foreign-direct-investment-confidence-index
7. Mining - https://calgarysun.com/opinion/columnists/guest-opinion-policy-uncertainty-remains-
major-barrier-to-mining-investment-in-canada
8. Food security - https://ca.news.yahoo.com/surge-food-prices-drives-retail-230100632.html
9. Farmers - https://ca.news.yahoo.com/surge-food-prices-drives-retail-230100632.html
10. Business automation - https://www.bnnbloomberg.ca/bdc-survey-indicates-growing-digital-
divide-among-canadian-businesses-1.1763863