OTTAWA, ON: The Bank of Canada gave its employees $45 million in pay raises and bonuses during the pandemic even though it failed to hit its inflation target, according to records obtained by the Canadian Taxpayers Federation. 

“Why is the Bank of Canada patting itself on the back and handing out millions in bonuses and pay raises while Canadians are struggling to pay for groceries and gas?” asked Franco Terrazzano, Federal Director of the CTF. “If its objective is to keep inflation low, then it doesn’t make sense for Canada’s central bank to hand out bonuses and pay raises while the cost-of-living soars.”

In 2020, the Bank of Canada gave pay raises to 1,728 employees, costing $5.3 million. In 2021, it gave pay raises to 1,857 employees, costing $5.2 million. It did not cut the pay of any employees in 2020 or 2021.

In addition to pay raises, the Bank of Canada gave bonuses to 1,632 employees in 2020, costing $16.2 million. In 2021, it gave bonuses to 1,752 employees, costing $18.4 million. The Bank of Canada told the CTF that it hands out bonuses for “successfully meeting or exceeding expectations.”

The federal Crown corporation’s mandate is to keep inflation around two per cent. Consumer prices increased by 8.1 per cent in June 2022, the largest annual increase since 1983. Year-over-year consumer price increases were above three per cent for nine consecutive months in 2021. 

The central bank printed more than $300 billion during the pandemic by purchasing financial assets such as government debt. 

In November 2020, Bank of Canada Governor Tiff Macklem told the federal finance committee that “inflation is projected to remain less than two per cent into 2023.” Macklem also told the committee that the central bank expects to keep its interest rate at its “effective lower bound” into 2023. 

In 2022, Macklem admitted that “we got some things wrong” and the deputy governor acknowledged that “we haven't managed to keep inflation at our target.” In July, the Bank of Canada issued the largest one-time interest rate hike since August 1998. 

“At best the Bank of Canada failed to keep a lid on rising prices and at worst it drove inflation by printing hundreds of billions of dollars out of thin air,” said Terrazzano. “The Bank of Canada says it gives bonuses for successfully meeting or exceeding expectations. So why are they getting millions in bonuses when they admit that they failed to hit inflation targets?

“The Bank of Canada should reverse these pandemic pay hikes and make it clear that it will not be handing out pay raises or bonuses in 2022.”