Feb 7, 2022
Osler Special Advisor Stephen Poloz recently published The Next Age of Uncertainty: How the World Can Adapt to a Riskier Future, described as a “far-seeing guide to the powerful economic forces that will shape the decades ahead.” In a wide-ranging interview, Maclean’s magazine’s Marie-Danielle Smith explores a variety of topics with the former Governor of the Bank of Canada — from the effects of the COVID-19 pandemic, to climate change, to the optimism that has earned him the moniker “Sunny Steve,” to the leadership insight he’s gained from The West Wing and Star Trek.
In response to her question about the inflation debate going on in Canadian politics right now, Stephen is blunt.
“It runs the gamut from plain wrong to just unthoughtful. What I like to do is measure inflation based on February 2020, before the pandemic,” Stephen explains. “You’ll find that, sure enough, overall the price level is up by 4.9 per cent over 21 months. Well, that’s quite a lot. But if you translate that into what would be the equivalent 12-month average rate, it’s about 2.8 per cent. And we know underneath that it’s all about oil. If you take food and energy out, which economists often do, it’s 2.1 per cent.
“Could it still be picking up? Yes, I’d say that’s a risk,” he continues. “But people aren’t doing a very careful job of understanding what prices have done. Supply chain issues will also get worked out — there’s too much money at stake for companies to not figure those things out. And the big counterargument, which I want to remind people of, is that the fourth industrial revolution [driven by artificial intelligence and biotech] will cause a lot of prices to fall.”
Read more about Stephen’s take on inflation as well as current topics like the geopolitics of water and the liberalization of global trade in Marie-Danielle Smith’s full article from February 7, 2022, “Stephen Poloz on economic dangers ahead, staying positive and lessons from Star Trek,” on the Maclean's magazine website. The interview also appears in print in the March 2022 issue of Maclean’s magazine.