Craig Johnston - Latest

• Potential output in Canada: 2024 assessment

  Staff Analytical Note 2024-11 Tessa Devakos, Christopher Hajzler, Stephanie Houle, Craig Johnston, Antoine Poulin-Moore, Ron Rautu, Temel Taskin

  We expect that potential output in Canada will grow by 2.3% and 2.5% in 2023 and 2024, respectively, and average slightly below 1.7% by 2027 as population growth moderates. Relative to the April 2023 assessment, growth is revised up in 2024, with a larger contribution from trend labour input due to higher-than-anticipated population growth. We revise down our estimates of growth over 2025–26.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Economic models, Labour markets, Monetary policy, Potential output, Productivity JEL Code(s): E, E2, E3, E4, E5
• January 15, 2024

  Flood risk and residential lending

  Craig Johnston, Geneviève Vallée, Hossein Hosseini Jebeli, Miguel Molico, Marie-Christine Tremblay, Aidan Witts

  We present key findings of a recent study that evaluates the credit risk that flooding poses to the residential lending activities of Canadian banks and credit unions. Results show that such risk currently appears modest but could become larger with climate change.

  Content Type(s): Publications, Financial System Hub articles Topic(s): Central bank research, Climate change, Credit risk management, Econometric and statistical methods, Financial institutions, Financial stability JEL Code(s): C, C8, C81, G, G2, G21, Q, Q5, Q54

• Climate-Related Flood Risk to Residential Lending Portfolios in Canada

  Staff Discussion Paper 2023-33 Craig Johnston, Geneviève Vallée, Hossein Hosseini Jebeli, Brett Lindsay, Miguel Molico, Marie-Christine Tremblay, Aidan Witts

  We assess the potential financial risks of current and projected flooding caused by extreme weather events in Canada. We focus on the residential real estate secured lending (RESL) portfolios of Canadian financial institutions (FIs) because RESL portfolios are an important component of FIs’ balance sheets and because the assets used to secure such loans are immobile and susceptible to climate-related extreme weather events.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Central bank research, Climate change, Credit risk management, Econometric and statistical methods, Financial institutions, Financial stability JEL Code(s): C, C8, C81, G, G2, G21, Q, Q5, Q54

• An Investigation into the Effects of Border Carbon Adjustments on the Canadian Economy

  Staff Working Paper 2023-27 Y.-H. Henry Chen, Hossein Hosseini Jebeli, Craig Johnston, Sergey Paltsev, Marie-Christine Tremblay

  We examine the economic implications of border carbon adjustments (BCAs) for Canada. We find that, BCAs, in the form of import tariffs, reduce Canada’s carbon leakage and improve its competitiveness when Canada is part of a broad coalition of BCA-implementing countries. Welfare also improves when tariff revenues are transferred to households.

  Content Type(s): Staff research, Staff working papers Topic(s): Climate change, International topics, Trade integration JEL Code(s): C, C6, C68, F, F1, H, H2, Q, Q3, Q37, Q5

• Assessing Climate-Related Financial Risk: Guide to Implementation of Methods

  Technical Report No. 120 Hossein Hosseini Jebeli, Craig Johnston, Craig Logan, Miguel Molico, Xiangjin Shen, Marie-Christine Tremblay

  A pilot project on climate transition scenarios by the Bank of Canada and the Office of the Superintendent of Financial Institutions assessed climate-related credit and market risks. This report describes the project’s methodologies and provides guidance on implementing them.

  Content Type(s): Staff research, Technical reports Topic(s): Climate change, Credit and credit aggregates, Econometric and statistical methods, Financial stability JEL Code(s): C, C5, C53, C8, C83, G, G1, G3, G32

• Transition Scenarios for Analyzing Climate-Related Financial Risk

  Staff Discussion Paper 2022-1 Y.-H. Henry Chen, Erik Ens, Olivier Gervais, Hossein Hosseini Jebeli, Craig Johnston, Serdar Kabaca, Miguel Molico, Sergey Paltsev, Alex Proulx, Argyn Toktamyssov

  Climate transition scenarios clarify climate-related risks to our economy and financial system. This paper summarizes key results of Canada-relevant scenarios developed in a pilot project on climate risk by the Bank of Canada and the Office of the Superintendent of Financial Institutions.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Climate change, Economic models, Financial stability, International topics JEL Code(s): C, C6, C68, D, D5, D58, E, E5, E50, O, O4, O44, P, P1, P18, Q, Q5, Q54

• Scenario Analysis and the Economic and Financial Risks from Climate Change

  Staff Discussion Paper 2020-3 Erik Ens, Craig Johnston

  This paper adapts climate-economy models that have been applied in other contexts for use in climate-related scenario analysis. We consider illustrative scenarios for the global economy that could generate economic and financial risks. Our results suggest there are significant economic risks from climate change and the move to a low-carbon economy.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Climate change, Economic models, Financial stability, International topics JEL Code(s): C, C6, C68, D, D5, D58, E, E5, E50, O, O4, O44, P, P1, P18, Q, Q4, Q5, Q54, Q55

• Do Protectionist Trade Policies Integrate Domestic Markets? Evidence from the Canada-U.S. Softwood Lumber Dispute

  Staff Working Paper 2020-10 Jinggang Guo, Craig Johnston

  We consider the effects of protectionist trade policies on international and domestic market integration, using evidence from the long-standing softwood lumber trade dispute between Canada and the United States.

  Content Type(s): Staff research, Staff working papers Topic(s): International topics, Market structure and pricing, Trade integration JEL Code(s): F, F1, F13, Q, Q1, Q17