Pierre Poilievre, moderate

Audit the Bank of Canada? Uh... sure?

Pierre Poilievre, Ottawa, April 28. Screen grab from his Twitter account.

Was that it?

The news release drew raised eyebrows among Ottawa reporters: “Pierre Poilievre, candidate for Prime Minister, will make an announcement and hold a press conference on policies relating to the Bank of Canada.” The venue for this: Poilievre would be standing in front of the Bank’s museum.

Well, some days it’s just great to be a journalist.

Here was the prospect of the MP for Carleton and probable front-runner for the Conservative leadership, singing the songs he loves best. Poilievre talks a lot about Bitcoin and has often accused the Bank of Canada of “printing money.” Not infrequently he goes quite a bit further than that. Only last week he called the Bank “financially illiterate.” Given the arms-length and cordial historic relationship between federal governments and Bank governors, this kind of talk is surprising at least. Maybe more. Some people worry it could cause Tiff Macklem, the Bank Governor, to resign, if Poilievre gets any closer to power.

But in the end, what was striking about Poilievre’s actual announcement is how modest it was. I liked Bloomberg editor Stephen Wicary’s reaction:

Stephen Wicary @wicary

Meh, this isn't nearly as exciting as it could be... #cdnecon

Of course your mileage may vary. It’s early days in the Conservative race, and we don’t have a lot of detail about how Poilievre or any of the other leadership candidates (there are 11 of them, last time I checked!) would govern. But of course Poilievre, who calls some of his opponents liars and depicts a pillar of Canada’s economy as a menace, is good at making a lot of people angry. So much so that by now, anything he says will make a lot of people angry.

But it is sometimes handy to read what is actually said. Given his reputation, I’m not sure it would have been entirely surprising if Poilievre had stood in front of the Bank museum brandishing shackles. “These are for you, Tiff! Hug your wife and kids goodbye!”

Instead he announced three things:

• As prime minister he would “adopt” and presumably pass Andrew Scheer’s private-members’ bill, from two months ago, making the Auditor General one of the Bank of Canada’s auditors.

• He would “ask the Auditor General to audit the Bank’s $400 billion quantitative easing program to determine why the Bank missed its inflation target so badly.”

• He would “stop the proposed Central Bank Digital Currency.”

Here’s the thing: in an only slightly different world, Chrystia Freeland could have made this announcement. None of these three steps would constitute a particular assault on the Bank of Canada. Indeed, anyone who buys Poilievre’s claims about how wildly out to lunch the Bank is (I don’t) would be struck by how limited Poilievre’s plan is.

Scheer’s bill on giving the Auditor General authority over the Bank of Canada is anodyne. As Scheer pointed out when he introduced the bill, Parliamentary auditors in the UK, Australia and New Zealand already have that authority. Here’s the agreement between the Bank of England and that country’s National Audit Office, if you want some light reading.

While it’s clear that extending the AG’s ambit to the Bank wouldn’t be a revolutionary change, it’s actually not clear that it would change anything, because as the economist Kevin Milligan points out, the Bank already gets audited a lot. It’s, properly, vastly more transparent than, say, the Canada Infrastructure Bank.

What about Poilievre’s plan to sic the AG on the Bank by asking it to audit quantitative easing? For one thing, the AG could ignore the request. “The ultimate decision about what to audit rests with the Auditor General,” the office’s website says. If AG Karen Hogan did audit the Bank, she might well find Poilievre’s claims and suspicions are unfounded. To me, the phrasing in Poilievre’s release — that he would “ask” the AG to peer into the Bank’s work, rather than “summoning” or “commanding” or something similarly stirring — is a tell. It suggests he knows very well what the limits of his authority would be.

Finally, there’s the bit about dropping Canada’s Central Bank Digital Currency (CBDC). First, this is clearly within a prime minister’s purview. Second, it may even be good policy. The Bank’s executives have repeatedly said that, while they’re doing technical work to prepare for a digital currency, the decision to proceed is political and rests with cabinet. Second, any article on CBDCs acknowledges they’re an interesting project while eventually getting around to sentences like, “CBDC is not without its problems. One obvious risk is to privacy. A number of U.S. lawmakers argue that China will use digital yuans for domestic surveillance” and “State-controlled credit could potentially be susceptible to political pressure for sector-focused lending” and “If the central bank gets hacked, then the whole system could be fatally compromised.”

Obviously, of course, an Ottawa-run cryptocurrency would be repulsive to people who financed February’s truckers’ convoy and who’ve hoped the Emergencies Act wouldn’t be used to track and block their transactions. And it’s at least arguable that Poilievre’s fascination with Bitcoin helps him signal to that corner of the electorate. But you hardly need to be an alt-right convoy kingpin to see the risks in this untested technology.

For a taste of why opposition to centrally-run cryptocurrencies might be widespread outside a narrow activist base, go back and read the previous paragraph, about tracking and preferential lending, and ask yourself how comfortable you’d be with all of that if Pierre Poilievre were prime minister. Sauce for the goose.

To sum up: Poilievre spends the winter banging on about the Bank of Canada, perches himself in front of a Bank of Canada building, and then… announces he’ll replace one diligent Bank auditor with another; ask for favours from the new auditor that the new auditor will be free to ignore; and stop a fin-tech experiment that just about any government might choose to stop sooner or later.

To return to my first question: That’s all?

Here’s what I think is going on here.

In 2006 I was reporting my underrated first book, about how Paul Martin lost that year’s federal election and Stephen Harper won it. Pierre Poilievre asked to sit down with me to make one fairly narrow point.

“Everyone thinks [Harper] seduced the centre,” Poilievre told me — that Harper was this super-conservative guy who somehow managed to calm down long enough to make himself presentable to a few suburban Red Tories. But what struck Poilievre as more signifianct, he said, was “actually the way he tamed the right.” He promised a free vote on repealing same-sex marriage and really not a lot more. But because he sounded culturally like the same sort of person as the party’s social conservatives, that’s all they needed. Harper’s real victory, Poilievre said 16 years ago, was making the new Conservatives “acceptable to mainstream people” without raising “a peep” of dissatisfaction from factions further from the mainstream. Here’s the full page. It’s a striking argument.

What if Poilievre is doing that sort of thing now?

Some of the coverage of Poilievre is so frenzied that you’d be forgiven for thinking he is at the extreme fringe of the Conservative leadership candidate field. That’s actually not the case. There are 11 candidates at last count. There will be more. Several have no discernible national profile (Baber? Dalton? Bourgault? Etienne?). Several of them are thought by anti-abortion activists to have more solid credentials than Poilievre. Others are thought to be more dependable enemies of globalism and the World Economic Forum than Poilievre, whose name briefly appeared on the Davos website and who, I’m told, gets asked about whether he’s in league with Klaus Schwab just about every day.

So Poilievre has a right flank to protect. Again, this may surprise you. It surprised me. But Jason Kenney offers an excellent daily illustration of what can happen to a Conservative leader who takes his right flank for granted.

If you want to harness the energy of a sometimes highly unpredictable activist base, but not dedicate yourself forever to pursuing its goals, what might you do? You might make a lot of noise about the base’s pet issues, then propose remedies that wouldn’t change much or take up much of your time in office. Here again, Harper offers a model.

In 2005 Harper was trying to get his new Conservative Party noticed in Quebec, where he was seen as a goofy outsider. Sounding as though he might understand Quebec nationalism’s assorted head trips was a challenge — he’d spent a decade making fun of Quebec nationalism — so what did he do? He picked two things Quebec commentators complained about nonstop: That Quebec can’t speak with its own voice on the world stage; and that all of the provinces are systematically cheated of the resources they need by the structures of Canadian federalism.

Harper agreed with both of these complaints and proposed remedies that in hindsight, and even at the time, could be viewed as minimalist tinkering — but received weirdly ecstatic coverage once implemented.

On the Quebec’s-voice-on-the-world-stage thing, he proposed separate Quebec representation at UNESCO. You may ask: What the hell is UNESCO? And I’ll have to admit I have no idea. Certainly, in the last decade, there have not been a lot of parties or holidays in Quebec to celebrate UNESCO Representation Day. But Harper managed to make this seem like a real solution to a real problem. On the so-called “Fiscal Imbalance,” he proposed a substantial increase in cash transfers to the provinces. The slide decks explaining this “fix” to the fiscal imbalance were prepared by bureaucrats who, a few years earlier when the Liberals were in power, had prepared slide decks explaining why the fiscal imbalance was an imaginary thing. Sometimes the same slides appeared in both decks.

This is ancient history so I don’t know whether my parallel is at all clear. If some issue is important to a faction in a complex party, one option is to embrace the discontent, and then propose what are, in the end, nearly insignificant responses. To be rhetorically hot and procedurally cool. A danger, of course, is that you’ll be a kind of sorcerer’s apprentice, whipping up extremism. But it’s also possible that, simply by lending an ear to some widespread concerns — people are hurt by the state of the economy, and the people who run the economy seem hardly to notice — you might even have a positive influence.

I offer no warranty for Pierre Poilievre. Honestly, lately I’m often reluctant to write about party politics, because the people who want Poilievre to succeed will think I’m their new friend, and the people who want him to lose will accuse me of “platforming” him. Frankly, and of course, the headline for today’s post is designed to make just about all of those people angry at me. But when a guy sounds like pitchforks but looks like auditors, I think that’s worth noticing. And I think these strategic considerations help explain it.