April 1, 2020 - The C.D. Howe Institute’s Monetary and Financial Measures Working Group, supported by a group of financial market experts, and co-chaired by former Governor of the Bank of Canada David Dodge and former Deputy Superintendent of OSFI Mark Zelmer, held its second meeting on Monday, March 30, 2020.
The working group agreed that, while there is a need for governments and central banks to monitor the effect of current crisis measures on debt and potential future inflation, these concerns are not a short-run issue and should not come at the expense of the immediate need for large-scale fiscal stimulus. To that end, the Monetary and Financial Measures Working Group recommends the following:
- Quickly operationalizing the Canada Emergency Business Account (CEBA) facility to ensure credit flows quickly to businesses most in need. This could be achieved by digitizing as many of the processes as possible, using, for example, the CRA’s digital ID system and GST register; by making the first $10,000 of CEBA a grant; and by simplifying the credit approval process.
- Announce up-front that an ex-post audit will happen to discourage fraudulent loan applications.
- The Bank of Canada should address funding pressures for provincially-regulated financial institutions, which may be more acute at the margin for these bodies than for most financial institutions, by ensuring access to the Bank’s liquidity facilities.
For more information, please contact: Jeremy Kronick, Associate Director, Research, C.D. Howe Institute; Laura Bouchard, Communications Manager, C.D. Howe Institute: Phone: 416-995-9365; email: lbouchard@cdhowe.org