Council Reports

June 22, 2020 – Governments and regulators should set out guidelines to allow for creativity in encouraging investments, such as a “sandbox” where innovative approaches can be tested, according to a new C.D. Howe Institute working group report. The C.D. Howe Institute Crisis Working Group on Monetary and Financial Measures argues such measures would increase the confidence of lenders and investors when engaging with businesses. The group, co-chaired by David Dodge, former Governor of the Bank of Canada, and Mark Zelmer, former Deputy Superintendent, OSFI, also tackled issues such as the underwhelming uptake of certain support measures offered by governments, uncertainty on future policy responses to the pandemic, strategies to...

April 23, 2020 – Between early March and mid-April, the Bank of Canada’s balance sheet more than doubled, dwarfing anything seen in 2008. Moreover unlike 2008, this increase has serious implications for future inflation, because the Bank’s increased liabilities are not the result of government deposits, but rather increased “settlement balances” or deposits by financial institutions, which increases the monetary base. Once the pandemic and economic crisis passes there is no easy solution to the potential inflation problem arising from more money chasing fewer goods and services. Trying to unwind the Bank’s balance sheet by selling longer-term assets is fraught with political risk. Alternatively, while a floor system could help manage...

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...