Why Statistics Canada’s leak concerns government integrity, not just a few numbers

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I watched Billions, the HBO show about hedge fund managers who trade inside information, prosecutors who build their business unethically and journalists who enter into “contracts” with both parties – all in the name of the public good.

Billions are the art that imitates life; this is pure fiction, but informed by the comments of Andrew Ross Sorkin, the New York Times economic columnist known for his access to the most powerful on Wall Street, who co-created the series.

Bloomberg terminals are ubiquitous across the billions, the data-gathering machines that have made Michael Bloomberg one of the wealthiest people in the world. “The Terminal” is also behind some real drama in Ottawa right now. The intrigue will never inspire a television script, but it is worth seeing if Prime Minister Justin Trudeau’s government really cares about the integrity of public information.

This is all linked to the leak of the latest Statistics Canada Labor Force Survey on May 8, with April employment figures appearing on Bloomberg screens about half an hour before their scheduled release to the public. The journalism branch of New York-based Bloomberg LP had achieved a scoop that I have never seen in more than two decades in this field.

The Bloomberg News Ottawa office successfully released hiring statistics for a relatively small group of public officials, politicians and staff aware of the data before it was officially released at 8:30 am Bloomberg attributed the information to a “familiar person”, suggesting the information was passed on and that she did not have a hard copy of the Statistics Canada report.

Two days later, Finance Minister Bill Morneau and Industry Minister Navdeep Bains told reporters that they were determined to find out how it happened. “We will not leave any stones unreturned,” said Morneau.

“What happened is totally unacceptable,” added Bains, who oversees Statistics Canada. “We are looking into this and will make sure in the future that we have the appropriate arrangements in place to ensure that it does not happen again.”

“What happened is totally unacceptable,” said Minister of Industry Navdeep Bains, who oversees Statistics Canada.


Blair Gable / Reuters files

Leaks occur all the time in government cities. This was unusual because it violated the principle that public information that can be used to generate rapid profit should be accessible to all at the same time.

On May 8, Bloomberg Professional Services customers (the terminal) and Bloomberg News subscribers took over everyone. They constitute a privileged group. A subscription to bloomberg.com costs about $ 55 per month, depending on the exchange rate. Renting a terminal is another thing: it costs about $ 2,000 US per month and there are about 325,000 subscribers.

My reference to Billions was not a flourishing one: by disclosing the numbers to Bloomberg, the source assured that they would be seen first by people who know exactly what to do with them.

“Premature disclosure of data (if that has happened) must be investigated and explained”, tweeted Paul Boothe, former Deputy Minister of Finance and Industry. “This is potentially market-sensitive information that gives an advantage to everyone who has it. This strikes at the heart of the integrity of our professional public service. “

Even some Bay Streeters were upset.

“While the tragic loss of jobs is the main concern, a serious security breach has occurred and some may have benefited from it,” said Derek Holt, economist at the Bank of Nova Scotia, in a note to his customers. “There must be a formal investigation into a serious leak that tarnishes the reputation of Canadian markets and the circumstances surrounding Bloomberg’s decision to report the leak. “

Bloomberg might have been able to just sit on his tip – and maybe a hungry tiger would just lick your fingers instead of biting your arm. Bloomberg has done what newspaper companies do. In 1989, Doug Small of Global Television obtained details of the federal budget and aired it. He was arrested, but the charges were later dropped. No one from Bloomberg will be imprisoned for this.

Could someone else? This cannot be ruled out. A person with quick access to the numbers could have seen an opportunity to make money, especially since the number of stocks was considerably better than the forecasts that traders had used to value financial assets. Taking advantage of this arbitrage opportunity would have been as easy as calling an acquaintance at a trading desk in Europe or North America and suggesting keeping your eyes open for some surprising Bloomberg titles outside of Canada.

The Canadian dollar appreciated after Bloomberg published its story, but not dramatically. However, this is not a good image for a country that considers itself to be a leading economy and a moderately large financial center. Last week after the flight, Canada was compared to Argentina, a country on the brink of its ninth defect and a history of false inflation figures.

Such comparisons are an exaggeration, but in the service of a point: Canada is now at least its second consecutive government that had no problem with the politicization of the data, whether it was the attack by Stephen Harper against the long census form or the Trudeau government. indiscriminate scattering of unrelated job demand data earlier in the COVID-19 crisis.

Statistics Canada now seems intimidated. On the morning of May 11, I asked for confirmation from who would receive job data in advance. The agency finally responded in an email that arrived at 5:52 p.m. Eastern time on May 12. The list, all with the approval of the Clerk of the Privy Council: Finance; the Privy Council Office; Employment and Social Development Canada; Innovation, Science and Economic Development Canada (Industry); and the Bank of Canada.

What purpose? With the possible exception of the central bank, of preparing messages, of course – so not at all for real purposes. If Bains is serious about preventing future leaks, he will keep politicians waiting for the official release like all of us.

For now, Statistics Canada is making the decision for him. “Pre-release information is provided under strict conditions and via secure channels,” the agency said in a statement. “There will be no pre-release of information (Labor Force Survey) until further notice.”

Financial Post

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