Pierre Poilievre fueled his successful campaign to lead the federal Conservative party with effective messaging that high inflation is Justin Trudeau’s fault. Poilievre coined the Twitter meme JustinFlation, which he featured in 15 campaign news releases.
To his credit, Poilievre also proposed solutions. For example, Poilievre stated: “The Trudeau government is ruining … the Canadian dollar, so Canadians should have the freedom to use other money, such as bitcoin … Choice and competition can give Canadians better money and … let Canadians opt-out of inflation with the ability to opt-in to crypto currencies.”
When the Bank of Canada released survey results showing that Canadian bitcoin owners “scored lower on questions testing financial literacy … than nonowners,” Poilievre — a bitcoin fund owner himself — denounced the bank as “financially illiterate.”
He then promised to “fire the governor of the central bank [and] replace him with a new governor who would reinstate our low-inflation mandate.” For the past year and a half, annual inflation has been above the 1 to 3 per cent target range agreed upon by the bank and the minister of finance.
Poilievre’s first solution to combat inflation — opting out with cryptocurrency — has been a disaster. He released his proposal on March 28 at a restaurant where he bought a shawarma with bitcoin, the most widely used cryptocurrency.
April was the first full month that Poilievre’s fans could have followed his example to opt out of inflation with bitcoin. August was the most recent month covered by a Consumer Price Index (CPI) report. The number of Bitcoins needed to pay for shawarmas and the other goods and services covered in the CPI jumped by 84 per cent in the four months from April to August, while prices measured in Canadian dollars rose just 1.9 per cent.
In just one month, from April to May, the cost of living measured in Bitcoins rose 30.1 per cent. June was even worse. Monthly inflation reached 31 per cent for Canadian bitcoin users. Each of these monthly inflation rates in bitcoin terms exceeded Canada’s highest-ever annual inflation rate of 21.6 per cent from June 1919 to June 1920.
The best that can be said about Poilievre’s crypto plan is that the rise in prices measured in Bitcoins did not meet the technical definition of hyperinflation — 50 per cent monthly inflation. But, consecutive monthly inflation rates above 30 per cent for bitcoin users was bad enough to warrant its own name. I nominate HighPierreInflation.
So far, opting into HighPierreInflation measured in bitcoin has turned out 44 times worse than JustInflation in Canadians dollars. Poilievre’s bitcoin fiasco is significant because it shows how unready he is to carry out the second part of his inflation-fighting platform — replacing Bank of Canada Governor Tiff Macklem if the Conservatives are elected.
The prime minister cannot directly fire the bank governor. But, even if Macklem refuses a newly elected Conservative government’s demand for his resignation, Prime Minister Poilievre would appoint a new governor when Macklem’s term expires in 2027.
Choosing a new Bank of Canada governor will be the most important decision that Prime Minister Poilievre ever makes. The bank governor has more power over the Canadian economy than the minister of finance.
Who would Poilievre pick? He has credited Prof. Saifedean Ammous and Robert Breedlove for teaching him about the crypto economy. These advocates dream of a day when bitcoin and other crypto currencies replace money controlled by central banks established by governments.
If these crypto dreams have not been realized by the time Poilievre is elected, he will have to pick a new Bank of Canada boss who knows how to control inflation in a dollar-based economy. Poilievre’s crypto experts will be of no help either as potential replacements for Macklem or as advisers about who to pick.
A man who depends on obscure crypto visionaries for economic policy advice and has his followers opt into HighPierreInflation of 84 per cent over just four months should not pick the next Bank of Canada governor and must not be elected prime minister.