Carney caught in political tug-of-war
Mark Carney. (Dave Thomas/QMI Agency)
OTTAWA — Politicians of all stripes turned to Bank of Canada governor Mark Carney Tuesday to boost their own arguments about the strength or weakness of the Canadian economy.
Carney, widely seen as the gold standard among the world's central bank governors, diplomatically gave a bit of comfort to all views during two hours of testimony in front of MPs at the House of Commons' standing committee on finance.
To the governing Conservatives, he validated their observations that Canada's job creation performance since the depths of the recession has been, as he said, "superior" to Canada's G7 peers.
"Canada has recovered all the jobs lost in the recession ... and then doubled again," Carney said. "About 70% of those have been in the private sector and the vast majority have been full time. And 70% of those have been in industries that pay above average wage. So from a quality-of-job perspective, it's high."
But, when the New Democrats pressed Carney further about Canada's employment data, he conceded that it was not an entirely rosy picture. He noted that the number of long-term unemployed in the country continues to be a problem, that the unemployment rate "is still higher than we would like to see" and that the total number of hours worked by those with a job is still too low.
"There is slack in the labour market. It is still considerable," Carney told the committee.
Carney also responded to Conservative questions on Canada's pipeline capacity, on productivity, and on so-called Dutch disease.
For example, Brian Jean, the Conservative MP who represents a riding in the heart of Canada's oil patch, noted that Canada loses $30 million to $40 million a day because Canadian oil producers have to sell their product at a discount because there is only one major customer: The United States. The government believes this problem can be solved with more pipelines to offshore customers.
"This is a big issue," Carney said. "This is ultimately an issue of pipeline and refining capacity. It is not our view that this is an issue of deficient U.S. demand. This is an infrastructure issue, yes."
The New Democrats, on the other hand, had Carney and his deputy Tiff Macklem respond to questions about pocketbook issues - household debt, the government's decision to backtrack on allowing long-term mortgages, and high credit card interest rates.
"Our concern is more that household debt had increased," Macklem said.