Posthaste: Did Ontario's premier just try to mess with the Bank of Canada's independence again?
Ontario Premier Doug Ford appeared to take a page out of Donald Trump’s playbook Wednesday, calling out the Bank of Canada and urging it to cut interest rates.
“The Bank of Canada, they need to lower those interest rates, by whatever, half a point,” Ford said Wednesday during a press conference following a meeting with premiers and Prime Minister Mark Carney. “Give some confidence to people.”
The Bank of Canada has held interest rates at 2.75 per cent for the last three consecutive rate announcements, though at its most recent meeting in July indicated that the door was open to future rate cuts. Some of Canada’s large financial institutions think the Bank of Canada is done trimming rates for now, while others are calling for up to two more reductions this year.
Trump has made a meal out of challenging the independence of U.S. Federal Reserve chair Jerome Powell, pressuring him not only to cut interest rates but also threatening to replace or even fire him. Trump’s actions have alarmed markets and investors, who argue that central bank independence is key to maintaining market and economic confidence.
“Central bank independence from sort of the day-to-day politics, I think, is really important,” Christopher Ragan, an associate professor and the founding director of McGill University’s Max Bell School of Public Policy, said. “If you want to be critical about the central bank stand on interest rates, then I think, frankly, the onus is on you to then argue why lower interest rates would be a better way to achieve their objective, which is low and stable inflation.”
Charles St-Arnaud, chief economist at Alberta Central said Ford’s comments risk “confusing the general public” about the role of the Bank of Canada, which is to set monetary policy for the entire country, not just Ontario.
“I understand there’s worries in Ontario, given the impact of tariffs on the manufacturing sector and the broader economy. And also, we need to remember that the Bank of Canada’s mandate is inflation. It is not employment, it is not growth,” Arnaud said.
Of course, Ford’s call to the Bank of Canada is no way matches the vitriol or the pressure that the U.S. president has brought to bear against Powell , which has included calling him names in a barrage of attacks on Trump’s Truth Social platform.
The Fed has maintained interest rates in the 4.25 per cent to 4.5 per cent band throughout 2025 after last cutting in December.
Ford has trodden the rate-cut territory before.
In early September 2023, he sent a letter to Bank of Canada governor Tiff Macklem arguing Ontarians “cannot afford the crushing impacts of further rate hikes,” adding that the central bank’s rate hikes had had a “devastating impact on people.”
Ford wasn’t the only Canadian politician to weigh in on interest rate decisions at the time. B.C. Premier David Eby called on policymakers “to consider the full human impact of rate increases and not further increase rates at this time,” while then-Newfoundland and Labrador premier Andrew Furey urged the Bank of Canada to “more fully consider the negative impacts” of further interest rate hikes.
At the time, the Bank of Canada had hiked interest rates to five per cent from a starting point in the cycle of 0.25 per cent.
What would be more concerning, Ragan and St-Arnaud said, would be if the prime minister were to jump into the monetary policy fray.
“I don’t think it’s at risk at any time with Mark Carney as prime minister, but obviously there’s always that temptation from politicians to try to do something to help their constituents,” St. Arnaud said.
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The Trans Mountain pipeline — finished years behind schedule and massively over-budget — has delivered an estimated $12.6 billion in new revenues to the Canadian oilpatch and padded government budgets, according to a new report.
Still, the report by the financial group Alberta Central says any new export pipeline that might be built under Prime Minister Mark Carney‘s nation-building infrastructure agenda would not likely bring in a similar windfall. — Reid Southwick, Financial Post
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Today’s Posthaste was written by Gigi Suhanic with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.
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