At 11:30 a.m., eight Thursdays a year, Ted Carmichael joins a Zoom call with 11 other eminent Canadian economic minds to debate their recommendation for the Bank of Canada’s next setting of the country’s short-term interest rate.

By 1 p.m. the same day, that prestigious group — the C.D. Howe Monetary Policy Council — has distilled the entire debate to a consensus recommendation on whether the Bank of Canada should raise, lower or hold steady its key interest rate.

The final decision is announced by the bank the following Wednesday — a foundational decision that can affect Canada’s entire economy. The policy council meets today, May 29, and the central bank’s latest interest rate setting is next Wednesday, June 4.

Being part of such an influential policy group is very satisfying, according to Carmichael, 74, a resident of Niagara-on-the-Lake for the past seven years.

Ever since an engaging Queen’s university professor hooked Carmichael on economics in the early 1970s, he has been passionate about the intensity of economic debate.

“I kind of like the debates,” says Carmichael, almost an understatement. “In economics, there is some certainty, some truth, some rules, but everything is debatable. Things are not black and white.”

He smiles when economists and weather forecasters are compared.  And he has a standard 90-second spiel to prevent vacant stares at cocktail parties when he is asked what he does.

“There are so many things you can get right and wrong in the field of economics. The future is not knowable. It doesn’t matter how good a model you have. There are shocks and surprises you never see coming.”

“That’s where the debates are. They are not: ‘You’re completely wrong and I’m completely right.’ ”

He describes the monetary policy group’s discussions as insightful: the chief economists of all six big banks, several university professors and Carmichael, long retired from the financial sector, but keen to remain a part of the debates.

“There are usually some broad areas of agreement, but also some interesting debates about the appropriate policy response that will keep inflation close to the 2 per cent target.”

He comes by his participation honestly.

An undergraduate economics degree from Queen’s, a master’s from Carleton and post-graduate studies back at Queen’s all set the stage for his early career providing policy advice to governments at all levels, on behalf of the C.D. Howe Institute.

Since then, his career has included stints at what is now BMO Nesbitt Burns, J.P. Morgan and the Ontario Municipal Employees Retirement System. And throughout, he has helped shape the policy rate recommendations of the Monetary Policy Council to the Bank of Canada.

Quiet and unassuming, he’s not one to broadcast his role in helping direct Canada’s economy, but the advice he and his fellow economists provide is crucial to the central bank’s decision-making — which literally can affect the lives of every Canadian.

Both Carmichael and his wife, Kim, grew up in small southwest Ontario towns, he in Tillsonburg and she in Wallaceburg. (In fact, he attended the same grade school as Lake Report contributor, Patty Garriock.)

After stints in Kingston, Ottawa and 37 years in Toronto, the Carmichaels moved to Old Town.

“We have absolutely no regrets. She’s busy in the Evergreen Choir. I’m busy with golf and other things here. Not an unusual story,” he says.

“And there is nothing better than NOTL when it comes to small towns. This place has got a lot of things that cities have, without all the congestion.”

And golf is never far from his mind, particularly the NOTL club’s Carmichael Cup.

No, it’s not named after him. In fact, his name is not even on the trophy, much to his chagrin. He’s been in the finals three times but hasn’t won. Yet.

And with a handicap of eight, he is a top-notch golfer and he might just do it this year.

“I love the course here. It is perfect for guys of our age. I call it Pebble Beach North.”

And in between his golf games, he still thinks economics. “I’ve lived my whole life doing economics and I enjoy it.”

He admits he is not always right. He smiles: “I would say I batted over .500.”

In the COVID recovery economic debate, he firmly believes the financial response was sound in the early months but went astray in the latter stages.

“It was like the heart stopped and the paddles were put on and it started up again,” he says, describing both one of the deepest economic declines in history and the swiftest recovery.

“Everything the government did in the early stages, for six months, was exactly what they should have done. All of this was extreme policy that we’d never seen before.”

“The ‘but’ is that the stimulus was very well-received. The politicians’ ratings went through the roof. So, they kept on doing it. In my view, once the vaccine was available, things should have stabilized and been dialled back.”

In Carmichael’s opinion the current trade dispute is more complex.

“We have a very tough job ahead of us,” he says. “It is not about trade deficits. It’s more about geopolitics between the U.S. and China. And about how a lot of countries have outsourced their manufacturing to China.”

This has caused unprecedented debt and potential vulnerability to a perceived enemy.

“The amount of interest (the U.S.) pays on its debt is out of control. So, they need to reduce the deficit and reduce their dependence on foreign suppliers.”

“Trump is using tariffs to force improvements on both of those fronts. The tariffs are to generate revenue to reduce the budget deficit. It really is just a big tax increase on the American people.”

“Canada finds itself caught in the middle. And we are vulnerable because of weaknesses in our own economy and because we are so dependent on the U.S.”

The solution for this well-connected career economist is the reduction of internal trade barriers and increased exports to new markets.

“We must negotiate the tariffs down as much as we can. Then we must find other ways to make the economy work better.”

“To me, the very best thing would be to create a strong investment climate, where companies want to stay in Canada.”

Carmichael expresses cautious optimism about Canada’s new government:

“I have met Mark Carney on several occasions and interviewed with him for a job with the Bank of Canada not long after he became governor. He was a smart and capable central banker.”

“My hope is that he will be as capable as our PM, where the issues are more complex and opinions vary on appropriate policy much more than they do on monetary policy.” 

But not without a great deal of debate.