The Bank of Canada’s monetary policy actions continue to meet the approval of business leaders in the country, according to a web poll of 100 CEOs conducted by COMPAS Inc.
The central bank lowered the overnight rate on April 22 by half a percentage point to 3%, down from 4.5% in October. Though not as aggressive as the actions of the U.S. Federal Reserve, the rate cuts are still significant, given that the Bank of Canada normally changes its rate by 0.25%. The respondents gave the central bank a score of 78 out of 100 for its recent actions, and they don’t see any drastic rate cuts in the near future.
They also felt inflation would remain relatively steady, around 2.5%. But one respondent had a different take. “The inflation rate question is a bit misleading,” wrote the CEO. “For all of Canada except Alberta, the rate will likely be less than 2%. For Alberta it will be much more, and the hot Alberta economy will destabilize the economy for the rest of the country.”
The panel also gave high marks to Prime Minister Stephen Harper this week for comments he made recently regarding the potential re-opening of the North American Free Trade Agreement, a hot topic in the U.S. Democratic party election primaries. The prime minister spoke at a summit in New Orleans with U.S. President George W. Bush and Mexican President Felipe Calderon, telling reporters, “Canada is the United States’ number one supplier of energy… If we had to look at this kind of an option, I’d say frankly we’d be in a stronger position now than we were 20 years ago, and we’ll be in a stronger position in the future.”
The panel awarded Harper a score of 82 out of 100 for his remarks. “I must give Harper credit for his principled foreign policy positions,” wrote one respondent. “I believe under his leadership we are seen as a much stronger nation.”
But not everyone was convinced. “The election candidates are just posturing, not to worry,” wrote one CEO. “Election promises are always broken, aren’t they?”