Prime Minister Mark Carney’s 10-minute “Forward Guidance” YouTube video on Sunday was  a “Davos 2.0” version of the speech he gave to the World Economic Forum in January, this time aimed specifically at Canadians. 

While putting it out on YouTube and promoting it on X, Facebook, LinkedIn and Instagram was clever, it contained nothing new, other than Carney saying that going forward he will talk to Canadians “regularly and directly” — presumably on social media — and  promising, “I will never sugarcoat our challenges.” 

Then it was back to his favourite theme that our trading relationship with the U.S. is broken and our ties with it are now a weakness rather than a strength. 

He reiterated his “Canada Strong” response based on new trade deals with other countries, bolstering Canada’s military and targeting economic relief for Canadians in tough economic times. 

Misleadingly, Carney claimed credit for developing the policy of “forward guidance”  — the title of his video — when he was Bank of Canada governor during the 2008 global financial crisis. 

He said it was “designed to assure people that however difficult the situation seemed on any given day, that we were acting, and importantly that we would continue to act, with overwhelming force against our problems until they were solved.” 

In reality, the principles of forward guidance have been around since the 1950s, whereby central banks publicly predict future monetary policy, with the goal of guiding interest rate expectations, influencing borrowing decisions and preventing surprises in the market. 

It doesn’t always work. 

For example, when current Bank of Canada Governor Tiff Macklem advised Canadians in July 2020 — well after the start of the pandemic — that: 

“If you’ve got a mortgage of if you’re considering making a major purchase, or you’re a business and you’re considering making an investment, you can be confident rates will be low for a long time.” 

Interest rates subsequently skyrocketed, leaving many Canadians on the hook for mortgages they couldn’t afford and business loans they couldn’t repay when they came due for renewal. 

Tellingly, Carney made no mention of how negotiations on the Canada-U.S.-Mexico Agreement (CUSMA) on trade are going, up for review July 1 — the deal he told Canadians he was best equipped to negotiate during last year’s election. Bad sign.