The policy makers at the Bank of Canada will not suffer the consequences of their actions.

The workers of Canada will.

As reported in Relentlessly Progressive Economics: Bank of Canada sends wrong signal, labour says

“The high dollar reflects some factors beyond our control, such as high energy and mineral prices, and a weak US dollar. However, the Bank of Canada can and does influence the exchange rate by setting our interest rates.

“Today’s clear signal that interest rates will be increased in the “near term” sends exactly the wrong signal to financial markets, and will stabilize or even increase the current exchange rate at an intolerably high level.

“Instead, the Bank of Canada should have said that the Canadian dollar is trading at too high a level and that interest rates will be cut if it does not fall.

“The Bank of Canada points to inflation slightly above the 2% target as a cause of concern, but this is mainly driven by booming housing prices in Alberta.

“Over the past year, real wages for hourly-paid workers have been flat, union wage settlements are barely matching inflation, and new job creation has been tilted to temporary and low-paid jobs in the lowest-paid parts of the private services sector.

“The Bank of Canada sees an economy at risk of over-heating. But the reality is a major ongoing loss of good jobs, poor quality new jobs, and stagnant wages. This is the reality which should have been addressed in today’s announcement.”

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