BoC to publish detailed summaries on policy deliberations after IMF recommendation

OTTAWA — The Bank of Canada will start publishing detailed summaries of its monetary policy deliberations next year following a recommendation from the International Monetary Fund (IMF).

The move comes after the IMF released a report on Wednesday that reviewed the central bank's transparency practices.

The summaries will provide more transparency to the public on what the bank is doing and give some insight into the decision-making process, said Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO Capital Markets.

"[It's] definitely an interesting and welcome addition from the Bank of Canada," he said.

The report said the Bank of Canada "sets a high benchmark for transparency," but still included 10 recommendations to help it improve, including publishing a detailed summary of monetary policy decisions by the governing council.

“The (Bank of Canada's) monetary policy framework is comprehensive, transparent, and understandable, although there is room for greater transparency with respect to the policy deliberations,” the report said.

In response to the report, the Bank of Canada committed to publishing summaries about two weeks after each monetary policy decision starting in January.

The summaries will not provide attribution to individual council members and will not record votes because there are no votes in the bank’s deliberation process.

The U.S. Federal Reserve already publishes minutes, released three weeks after their meetings. Transcripts of the meetings are also made public after five years.

However, Reitzes said a key difference between the Bank of Canada and the Federal Reserve is that the Bank of Canada's decision-making process is consensus-driven in contrast to the Fed, where 12 members of the Federal Open Market Committee vote on monetary policy decisions.

"Once they make their decision, everyone has the same view. So it is a bit different," Reitzes said. "That does change things a little bit and make it maybe a little bit more challenging to provide good colour to the conversation that they're having at the governing council."

Western University economics professor Stephen Williamson said given a transcript won't be provided, the extent of information the public gets about the decision-making process will depend on how the summaries are crafted.

"If it's not word-for word, then you have to trust somebody to have actually given you the gist of was what was discussed," Williamson said. "But it's better than the nothing we have at the moment."

The Bank of Canada also said it has agreed to improving transparency around its risk management and audit functions, as well as strengthening its public communication efforts.

“We know that by being transparent, we can help all Canadians understand what we are doing and why, and that’s essential for their trust,” Bank of Canada governor Tiff Macklem said.

The Bank of Canada currently publishes a statement when it releases its rate decision, but does not provide a record of its deliberations. Four times a year it also releases its monetary policy report, which includes its latest forecast for the economy, alongside its rate decision.

The IMF report is part of a pilot project to evaluate transparency practices in central banking globally.

As part of the review, a team of independent experts met with staff and management from the central bank, as well as a range of stakeholders, which included academics, think tanks, parliamentarians, market participants and journalists.

Among the other recommendations was to communicate more frequently with the public using “plain language” to promote financial stability.

This report by The Canadian Press was first published Sept. 28, 2022.

Nojoud Al Mallees, The Canadian Press