Why MP questions put the Bank of Canada governor in a political minefield

Bank of Canada governor Tiff Macklem navigates a political minefield every time he testifies before the House of Commons finance committee.

Four times a year, members of Parliament get the chance to question the governor on monetary policy.

At a time when inflation and interest rates are both high, MPs — particularly Opposition ones — are eager to ask him about politically charged issues.

Is the federal government spending too much? How much is carbon pricing pushing up prices? Would eliminating it bring interest rates down?

Mindful of the weight his words carry, the governor keeps his responses focused on the implications of fiscal policy on inflation.

But despite Macklem’s best efforts, his words are often clipped and repackaged by politicians in service of their own narratives.

Parliamentary committees have become increasingly polarized over the course of the last two Liberal minority governments and have provided a venue for political theatre outside the House of Commons.

That was on full display Thursday when Conservatives sent out a news release following Macklem’s appearance in committee, which said the governor had “confirmed that Trudeau’s $61 billion in new spending is ‘not helpful’ in bringing inflation down and lowering interest rates.”

Clips on X quickly circulated as well.

But what was missing was the fact that Macklem never singled out federal spending.

He noted provinces increased their spending, and it was largely deficit-financed.

“That has increased the contribution to growth from government,” Macklem said in response to a question on whether fiscal and monetary policy are rowing in the same direction.

Macklem noted the central bank’s April monetary policy report forecasts aggregate government spending will