Former Bank of Canada Governor Mark Carney advises Prime Minister on COVID-19 economic response

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Mark Carney – the former Governor of the Bank of Canada and the Bank of England – acted as informal adviser to Prime Minister Justin Trudeau on the federal government’s response to the COVID-19 pandemic.Carney “has certainly advised the Prime Minister through different phases of this,” said a senior government official speaking on the merits. “I hope we can count on him for more. “

News of the informal role was first reported by Bloomberg on Monday.

Carney has long been said to have political aspirations since returning to Canada after his tenure at the Bank of England expired earlier this year. Many in liberal circles see Carney as one of the top contenders for finance minister if he runs for a leadership contestant or a possible leadership contestant to eventually succeed Trudeau.

With a sudden vacancy in the York Center constituency in the Toronto area, there have been rumors that Carney could run for an upcoming by-election, although top Liberal sources have repeatedly thrown the l cold water on this idea.

Carney is well placed to advise the Prime Minister during difficult economic times. He led the Bank of Canada during the global financial crisis more than a decade ago and served as a leader at the Bank of England during the uncertainty of Brexit.

Carney, a former investment banker currently serving as UN special envoy on climate action and climate finance, likened the climate crisis to a financial crisis – and urged the financial sector to help tackle the problem.

Under pressure

Liberals are under pressure to curb the economy after pandemic-related spending helped push the projected deficit for 2020-21 to $ 342.2 billion – some ten times higher than expected before COVID-19 – according to a financial overview provided last month by Finance Minister Bill Morneau.

Most of that can be attributed to the $ 212 billion in direct support measures Ottawa offers to individuals and businesses.

Morneau said at the time that, aside from pandemic program spending, the economic downturn would have added an additional $ 81.3 billion to the deficit in 2020-21.

The economy is expected to shrink 6.8% this year before rebounding 5.5% next year, Morneau said, making the crisis the worst economic contraction since the Great Depression.

The economy is expected to shrink in 2020-2021 more than twice as much as in 2009-10 in response to the global financial crisis.

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