“Although Mr. Poloz's anecdotal approach may help yield a better understanding of the Canadian mindset as it relates to the economy, I'm not so sure it's going to help much on the prediction front as a result of the ties Canada has with the rest of the world, and the many forces that affect the direction it takes,” John Bargis of Mortgage Edge told MortgageBrokerNews.ca.
The Bank of Canada indicated computer models and data will be relied upon less while surveys, discussions and meetings will have a greater impact.
"We are working hard to refine those models, but this experience is also leading us to put increased emphasis on anecdotal evidence – real conversations with real Canadians making real economic decisions," Poloz said in the Bank of Canada’s annual report.
It may be advantageous for the BoC to consider the thoughts and opinions of financial services professionals and organizations that are on the frontlines. However, Canada is very much tied to a number of foreign economies, making predictions all the more difficult.
“We are very much a part of the vastly competitive Global economy, which makes any Central Bank's predictions all the more difficult," Bargis said. "Let’s look at how many times Governor Carney over the last 5 years of his term warned Canadians to strap themselves in, in anticipation of rising interest rates. Of course we all know what followed - B-20 and the soon to be implemented B-21 in lieu of."
The Governor of the Bank of Canada, Stephen Poloz, stated Monday the central bank will now consider “anecdotal evidence” along with economic data when making its decisions; an approach that one leading broker believes will not aid in considering global effects on the Canadian economy.