Bank of Canada rebukes claims Pierre Poilievre has made on inflation, cryptocurrency

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Cryptocurrencies are not a way to “opt out” of inflation and they will in no way replace the Canadian dollar, said the two main officials of the Bank of Canada in an apparent rebuke to Conservative Party of Canada leadership candidate Pierre Poilievre.

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Poilievre, who lost his role as Finance critic ever since he decided to run for his party’s main job, was not there to butt heads against Bank of Canada Governor Tiff Macklem and Deputy Governor Carolyn Rogers during the Parliamentary Finance Committee on Monday.

But others, including in his own party, made sure to fact-check recent claims the leadership candidate has made on inflation or cryptocurrency.

Poilievre made headlines with his praise of cryptocurrency, alleging it can help Canadians “opt out” of the record-high inflation they are experiencing right now. He has also been very critical of Canada’s central bank, slamming it as being “financially illiterate” on Twitter when a study came out linking bitcoin owners as young, educated men with low levels of financial literacy.

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“Do you believe there is a way for Canadians to entirely opt out of inflation? Specifically, are cryptocurrencies a way, for example, to opt out of inflation?” asked Liberal MP Yvan Baker when his time came to interrogate the Bank of Canada witnesses during the Finance committee.

“If Canadians are looking for a stable source of payment and stable source of value, cryptocurrencies don’t really meet that test. The volatility of cryptocurrencies, if you look over the last year or two, has been higher than gasoline, higher than the Canadian exchange rate, higher than most commodities,” responded Rogers.

“So we don’t see cryptocurrencies as a way for Canadians to opt out of inflation or as a stable source of value,” she added.

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Later, Conservative MP Ed Fast, who supports Poilievre’s rival Jean Charest, asked if the witnesses expect cryptocurrencies to “ever replace the Canadian dollar as our legal tender in Canada” in the near or medium term, to which Governor Macklem essentially said no.

“We certainly expect the Canadian dollar will remain at the centre of the Canadian financial system,” he said.

In an interview, Fast insisted on the importance of the independence of the Bank of Canada and said that he would disagree with anybody who challenges that notion.

“I believe the central bank has, for years, operated in a way that, for the most part, has been able to keep inflation in check, which is its primary role, and has responded to financial crises over the years that have, I think, served Canadians well,” said Fast.

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It’s not the Governor of the Bank of Canada’s fault

Conservative MP Ed Fast

He added that “it’s not the Governor of the Bank of Canada’s fault” that Canada faces such high inflation, but rather the “massive borrowing and spending” from the federal government.

Conservative MP Dan Albas, who supports Poilievre for leader, was not ready to go as far as the Carleton MP in his criticism of the Bank of Canada, but insisted on the importance of keeping their feet to the fire.

“I think that any institution worth its salt needs to present its arguments, especially with something as important as price stability. Inflation can eat out an economy and it’s usually the most vulnerable who pay the price for it, so there needs to be firm accountability,” he said.

Governor Macklem did make an act of contrition in front of parliamentarians and admitted that the Bank of Canada had gotten “a lot of things right,” but “some things wrong.” That is why they hiked the interest rate by 50 basis-points two weeks ago in an usual move to counter inflation, and are considering another similar hike in June as well.

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Speaking after the meeting, Bloc Québécois MP Nathalie Sinclair-Desgagné said that the central bank seemed to have “understood some of their mistakes” and said she was reassured by that admission. But she disagreed with Poilievre’s harsh criticism of the institution.

“Personally, I don’t agree, in the sense that the Bank of Canada has experts who are doing their job. They can always do better, they’ve admitted it today, so we’re there to encourage them, to push them to do better,” said Sinclair-Desgagné.

Liberal MP Anthony Housefather, who publicly expressed disappointment and concern with Poilievre’s most recent concerns about the Bank of Canada, said politicians should be discussing solutions instead of insulting one another whenever they disagree.

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“What I would hope for is that all parties — my party and the opposition parties — have a sense of responsibility to instill confidence in the population in our central institutions and also not to attack one another in an unfair and mean way,” said Housefather.

“I think respectful politics is what Canadians are looking for, not attack dogs.”