The Bank of Canada (BoC) paid out almost $27 million in raises and bonuses in 2022, according to Access to Information records, despite admitting that it made poor inflation forecasts.
Records obtained by the Canadian Taxpayers Federation (CTF) showed that about half (49 percent) of the central bank’s workforce, or 1,095 employees, were paid over $100,000 last year, as first reported by Blacklock’s Reporter.
In addition, “The average bonus among staff was $11,200, with 80 percent of the workforce receiving one,” wrote the CTF in a press release on July 13. This represents nearly 1,800 employees.
Bonuses amounted to over $20.2 million in 2022, and records showed that the Crown corporation also paid out over $6.5 million in raises the same year.
“Since the onset of the COVID-19 pandemic, the Bank of Canada rubberstamped nearly $72 million in bonuses and pay raises for staff,” the CTF wrote. “Not a single Bank of Canada employee had their pay cut in 2020, 2021 or 2022.”
In 2020, the BoC gave its employees over $16.1 million in raises and over $5.2 million in bonuses, while in 2021 it gave out over $18.4 million in raises and more than $5.1 in bonuses, according to the CTF.
Inflation Rates
The BoC and the federal government review and renew their agreement on Canada’s monetary policy framework every five years, and under the 2022–26 agreement, the cornerstone “remains an inflation target of 2 percent inside a control range of 1 to 3 percent,” according to the bank.BoC governor Tiff Macklem had previously predicted that Canada’s annual inflation rate would be around 2 percent by the end of 2022, but it closed out the year at 6.3 percent.
Mr. Macklem had also told the House of Commons Standing Committee on Finance in November 2022 that “inflation is projected to remain less than 2 percent into 2023.”
The next month, in a year-end interview with The Globe and Mail on Dec. 16, 2022, Mr. Macklem said, “That’s a very big forecast error,” adding, “We have some explaining to do.”
The BoC now projects that Canada’s annual inflation rate will hover around 3 percent for the next year before returning to its 2 percent target in the middle of 2025.
The central bank has now hiked the country’s key interest rate 10 times since March 2022, following its most recent quarter-percentage-point raise to 5 percent on July 12.
In his opening statement at the press conference announcing the rate hike, Mr. Macklem said this is in response to more persistent excess demand in the economy and to inflation “having come down but not by as much as we expected.”
He said that “higher interest rates are needed to slow the growth of demand in the economy and relieve price pressures.”
The BoC wrote in a statement on the same day that “Canada’s economy has been stronger than expected,” adding that it “remains concerned that progress towards the 2 percent [inflation] target could stall.”
“Core inflation is not yet on a firm downward trend,” it wrote in its July 2023 Monetary Policy Report issued July 12.
Rahul Vaidyanath contributed to this report.
