OTTAWA – The central bank governor’s communications style is under a microscope — but the jury is still out on whether he needs to change his strategy.Experts shared a range of views Thursday at a Bank of Canada conference about governor Stephen Poloz’s messaging ahead of his interest-rate decisions, which included a hike last week that caught some analysts by surprise.The rate decision attracted open criticism from forecasters over the fact the bank didn’t offer more-explicit signals about its intentions beforehand.Others, however, have dismissed the concerns. They’ve argued that stronger-than-expected economic numbers released before the rate increase provided more than enough information to persuade markets that, despite the bank’s silence, a hike was on the way.The debate over central bank communications emerged as a central theme at the Bank of Canada headquarters, where dozens of the country’s top economic experts gathered for a conference on monetary policy.Attendees offered different opinions as well as some advice on the issue.Some suggested the bank offer a consistent level of public transparency when it comes to its expected interest-rate path, while others recommended senior officials spend more time updating the public.But those perspectives were countered by experts who insist there’s no need for the bank to give more signals to markets, which economists often refer to as “forward guidance.”The issue made headlines in recent days after BMO chief economist Doug Porter wrote a paper to clients calling the central bank’s pre-decision communications an “epic” failure.Porter said he had no problem with the rate hike itself, because the stronger economy had made a solid case for it.But he argued the bank caused significant uncertainty and a “fairly violent” market reaction by not making any public remarks for about two months before the rate increase.In contrast, critics have also noted that, ahead of the bank’s July rate increase, Poloz sent clear signals he had shifted to a rate-hiking path.Porter’s criticism caught the central bank’s attention, which responded with a detailed defence.The bank argued that a large percentage of traders had correctly read Poloz’s most-recent messaging in July, which had indicated future rate decisions would be guided by economic data. Market expectations in the days before the announcement showed the odds of a hike were about 50-50, bank spokesman Jeremy Harrison said.Harrison also pointed to the unexpectedly strong numbers for second-quarter growth released less than a week before the rate announcement — during the bank’s pre-decision blackout period. The bank has a policy of avoiding any external communications about the economic outlook and monetary policy in the week before rate decisions are announced.With so much attention paid to the issue in recent days, it became an unofficial theme of a conference on the renewal of the bank’s inflation-targeting commitment in 2021. The issue popped up on stage during panel discussions and on the sidelines of the event.After the conference, senior deputy governor Carolyn Wilkins said she’d like to study transparency and communications suggestions that could add clarity that’s useful for credibility, anchoring expectations and avoiding unproductive volatility.“My hope is that there’s some way to interact that makes it easier for people to understand how we think about the economy, what information is important to us and how that might be evolving,” Wilkins told reporters.“My hope is that we will continue to improve that. My assessment is that, in general, it’s OK. It’s pretty good.”Wilkins said if the bank decides to increase the number of speeches and news conferences, those changes could be implemented soon.During one session, panellist Michelle Alexopoulos, a University of Toronto economist, said the debate over how the bank communicated — or did not communicate — its thoughts before the July and September hikes suggests that forward guidance should become a regular tool to ensure consistency.“If we don’t want to give it all the time, that’s fine, but we should give some guidance as to when we’re going to use the guidance so that we’re not actually caught in some situations where individuals are guessing,” Alexopoulos told the audience, which included Poloz himself.She suggested the bank introduce a form of “conditional” forward guidance to leave it some wiggle room in case of sudden economic changes.But others said Poloz doesn’t need to adjust his communications.Don Drummond, a Queen’s University professor, said he didn’t think the recent rate hike hinged on the strong growth number released just days before the decision.The economy, he added, had been showing strength for a while.“I think the onus is on everybody else — why wouldn’t they raise interest rates?” said Drummond, who sat beside Poloz in the audience at conference.“I would have been shocked if they had not gone ahead and taken that as an opportunity to raise interest rates. So, I think there’s some misunderstanding about how monetary policy is geared.”Drummond, a former senior official with the federal Finance Department, also said there’s an incorrect notion out there that monetary policy is a precise science.Poloz did not address the conference, which included many international experts.About three years ago, Poloz announced the bank would move away from forward guidance, which was adopted by the bank in the wake of the financial crisis.At the time, he said forward guidance reduced uncertainty for markets about the path of interest rates when they were already at a very low level.However, Poloz noted guidance could also create significant volatility when markets perceived the bank was preparing to change its position.Follow @AndyBlatchford on Twitter read more

CALGARY – The Transportation Safety Board of Canada says a lack of detailed inspection procedures contributed to a 10,000-litre crude oil leak east of Edmonton last March.The board says the leak from a storage tank at the Enbridge terminal in Sherwood Park was discovered by employees who noticed oil in a creek that flows through the property.It was then discovered that about 10,000 litres of oil had entered the tank’s secondary containment berm and 3,000 litres made it from the berm into the creek.It says all the oil was recovered before entering the nearby North Saskatchewan River.The board says the leak occurred when a gasket in a valve was displaced out of its original position, likely due to volume expansion of frozen water. It says a sluice gate valve at the end of the berm’s storm water drain pipe could not achieve a tight seal due to corrosion.It says Enbridge has since initiated actions to ensure that all tank and containment berm components are thoroughly inspected. read more

HALIFAX – A G7 ministers meeting in Halifax will promote the Canadian-led oceans plastic charter, with Ottawa planning to take the accord to the United Nations General Assembly, says the federal environment minister.The non-binding accord was agreed-to by five of the G7 leaders and the European Union at the G7’s Charlevoix summit in June, though neither the United States nor Japan have signed on yet.But the agreement needs wider international acceptance to stop the use of the oceans as open dumps, with over half of the waste coming from Asian nations who aren’t G7 members.Environment Minister Catherine McKenna said in an interview Monday the ocean plastics charter will be among the key features of the three-day Halifax gathering that begins Tuesday, as Canada wraps up its presidency of the G7.“We know plastic … is literally choking our lakes and rivers and we have to take steps to stop that or we’ll have more plastic pollution than fish by 2050,” she said from Ottawa.The meeting will also see discussion around the rules for bringing about the Paris climate agreement’s goals for reductions in carbon emissions, she said.In addition, the wide-ranging agenda includes discussion of measures to prevent illegal fishing, coastal adaptation to extreme weather and, on Friday, a gathering of G7 energy ministers that will include talks on clean energy.However, the plastics accord discussion — occurring in a province that relies on a healthy marine environment for fishing and tourism — has strong political appeal, say some observers.“If they make movement on this, it will resonate well with the public and in other countries,” said Ashley Wallis, program director of water and plastics at Environmental Defence.Sad images of plastic straws and bags causing the death of turtles have become widespread in social media around the globe, while the Great Pacific Garbage Patch in the middle of the Pacific Ocean was recently estimated at 79 thousand tonnes of ocean plastic — about half of it comprised of lost fishing nets.The charter’s provisions call for national governments to set standards for increasing the reuse and recycling of plastics rather than trashing them. It also calls for businesses to take responsibility for production methods that eliminate waste — an approach referred to as “extended producer responsibility.”Ottawa has yet to fully outline what its national strategy to reducing plastic waste will be, and what the broad goals of the accord will mean on the ground.However, McKenna said she’ll have some announcements during the meeting, as will Fisheries Minister Jonathan Wilkinson, who is expected to announce programs to reduce the amount of discarded fishing gear.In addition, McKenna says an effort is underway to take the ocean plastics charter to the international stage and gain more signatories, both from countries and large corporations.The minister said she’s been told Japan will “probably not” sign on to the accord in Halifax, though her officials were “working hard” with its government.Meanwhile, McKenna said the plan is to bring it to the G20 group of nations, which includes China, Indonesia and other major producers of the waste.The cabinet minister also said in Monday’s interview that Ottawa is planning to present the accord at the United Nations’ 73rd General Assembly next week.“The focus is on the G20 to continue it, but we have the United Nations General Assembly in September and that will be a focus because we really would like to take it to the world,” she said.McKenna’s office declined to confirm if the environment minister herself will be heading to New York next week to promote the charter.Louie Porta, vice-president of operations for Oceans North, said in an interview that Canada needs to take clear steps at home on plastics and marine waste to sustain international credibility.He said in an email that Canada has “done relatively little on fishing gear recovery or incentives for not leaving fishing and aquaculture gear in the water.”The non-profit group says that Ottawa needs to create a national “extended producer responsibility system, where the manufacturer designs products and packaging that never become waste and are always part of the supply chain.”“This would lead to a reduction in packaging and waste as manufacturers would not want to bear these costs,” he wrote in an email.Some environmental groups have been critical of the charter for its failure to act more rapidly, and for leaving in wording that would allow for the incineration of plastics.Despite a rise in recycling and composting in municipalities, Canadians remain among the most wasteful people in the developed world, with garbage being produced by households going up 18 per cent from 2012 to 2014, with 25 million tonnes of waste ending up in landfills that year.A spokesman for the Suzuki Foundation has said the only measure that would make a major impact on plastic waste that ends up in waterways and oceans is “complete elimination of disposable plastic products.”McKenna said she has to work with provinces and municipalities, and she’s also bringing businesses on board with practical arguments of how waste can become a financial asset.“We’re throwing out to $150 billion (in plastic waste), which doesn’t make any sense,” she said. read more