The Bank Of Canada really said "not today!"
The Bank of Canada isn't just fighting against the current rise in inflation, but it's also combatting claims that it's "printing money" to fund the Government of Canada.
Conservative Party leader candidate Pierre Poilievre is one of many who have called out the central bank and Justin Trudeau for "printing money," an act he claims is what has led to the highest inflation in Canada in over 30 years, which Poilievre calls "JustinFlation."
"Printing money to pay for excessive government spending has caused today’s inflation. Now Canadians will pay for it a second time with higher interest rates," Poilievre tweeted out on August 29.
Well, the Bank of Canada is attempting to set the record straight.
\u201c#YouAskedUs if we printed cash to finance the federal gov\u2019t.\n\nWe didn't.\n\n\ud83d\udc47 Keep reading to learn how we supported the economy from the shock of the pandemic. #CdnEcon #AskTheBoC\n\n1/6\u201d— Bank of Canada (@Bank of Canada) 1661436001
"You asked us if we printed cash to finance the federal government. We didn't," the Bank tweeted out on August 25.
"The pandemic has been a crisis like no other. As a result, we took various measures, like buying bonds, to support and ensure a strong and stable economy." The central bank went on to explain that they bought existing government bonds from banks on the open market in order to help unlock frozen markets at the start of the COVID-19 pandemic.
This ultimately allowed households, companies and governments to access funding when they needed it, it says. "We did not print cash to pay for the bonds. We bought the bonds with settlement balances – a kind of central bank reserve – not with bank notes."
While this is where things could get a tad confusing, the Bank of Canada cleared up the difference between dipping into its reserves versus printing physical banknotes.
"Settlement balances don’t permanently add to the money supply. Unlike cash, we can remove those reserves from the system. And you can see that we’ve been doing just that."
This article's cover image was used for illustrative purposes only.