Bio

Craig Johnston is the Director of the Commodities Division in the international Economic Analysis Department. His work experience includes research and policy work related to macroeconomic modelling, commodity and energy markets, international trade, and climate change. Before joining the Bank of Canada, Craig held an academic position at the University of Wisconsin-Madison and was previously a lecturer in economics at the University of Victoria. Craig holds a Ph.D. in Economics from the University of Victoria.

Staff analytical notes

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

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Staff discussion papers

Climate-Related Flood Risk to Residential Lending Portfolios in Canada

Staff Discussion Paper 2023-33 Craig Johnston, Geneviève Vallée, Hossein Hosseini, 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

Transition Scenarios for Analyzing Climate-Related Financial Risk

Staff Discussion Paper 2022-1 Y.-H. Henry Chen, Erik Ens, Olivier Gervais, Hossein Hosseini, 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

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Staff working papers

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

Staff Working Paper 2023-27 Y.-H. Henry Chen, Hossein Hosseini, 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

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

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Technical reports

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

Technical Report No. 120 Hossein Hosseini, 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

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Bank publications

Financial System Hub articles

January 15, 2024

Flood risk and residential lending

Craig Johnston, Geneviève Vallée, Hossein Hosseini, 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

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Journal publications

Refereed journals

  • “Do protectionist trade policies integrate domestic markets? Evidence from the Canada-U.S. softwood lumber dispute” (with J Guo) Forest Policy and Economics 130(2021): 102525
  • “Knock on Wood: Managing Forests for Carbon in the Presence of Natural Disturbance Risk” (with A Siebel-Mckenna and GC van Kooten) Spatial Economic Analysis 15(2020): 299-310.
  • “The Global Warming Potential of CO2 Emissions from Bioenergy with Carbon Capture and Storage.” (with P Withey, and J Guo) Renewable and Sustainable Energy Reviews, 115 (2019), 109408.
  • “Global Mitigation Potential of Carbon Stored in Harvested Wood Products,” (with V Radeloff) Proceedings of the National Academy of Sciences. 16 (2019): 14526-14531.
  • “From Source to Sink: Past Changes and Model Projections in Carbon Sequestration in the Global Forest Sector,” (with J Buongiorno, P Nepal, and J Prestemon) Journal of Forest Economics 34(2019): 47-72.
  • “Carbon Uptake and Forest Management under Uncertainty: Why Natural Disturbance Matters,” (with GC van Kooten and F Mokhtarzadeh) Journal of Forest Economics 34(2019): 159-185.
  • “Shared Socioeconomic Pathway Narrative Development for Global Forest Sector,” (with A Daigneault, A Korosuo, J Baker, N Forsell, J Prestemon, and B Abt) Journal of Forest Economics 34(2019): 7-45.
  • “Effects of Parameter and Data Errors on Predictions in a Model of the Global Forest Sector,” (with J Buongiorno, J) Forest Policy and Economics 93(2018): 10-17.
  • “Potential Effects of United States Protectionism and Trade Wars on the Global Forest Sector,” (with J Buongiorno, J) Forest Science 64(2018): 121-128.
  • “Managing Forests for Carbon and Timber: A Markov Decision Model of Uneven-Aged Forest Management with Risk,” (with P Withey) Ecological Economics 138(2017): 31-39.
  • “What’s Next in the U.S.-Canada Softwood Lumber Dispute? An Economic Analysis of Restrictive Trade Policy Measures,” (with R Parajuli) Forest Policy and Economics 85(2017): 135-146.
  • “Risk Aversion and Risk Seeking in Multi-Criteria Forest Management: A Markov Decision Process Approach,” (with J Buongiorno and M Zhou) Canadian Journal of Forest Research 47(2017): 800-807.
  • “Assessing Economic Impacts of Internet Adoption through Reduced Pulp and Paper Demand,” (with T Ochuodho and P Withey) Canadian Journal of Forest Research 47(2017): 1381-1391.
  • “Impact of Brexit on the Forest Products Industry of the United Kingdom and the Rest of the World,” (with J Buongiorno). Forestry: An International Journal of Forest Research 90(2017): 47-57.
  • “An Assessment of Gains and Losses from International Trade in the Forest Sector,” (with J Buongiorno and S Zhu) Forest Policy and Economics 80(2017): 209-217.
  • “Impact of inefficient quota allocation under the Canada-US softwood lumber dispute: A calibrated mixed complementarity approach,” (with GC van Kooten.) Forest Policy and Economics 74(2015): 71-80.
  • “Global Paper Market Forecasts to 2030 under Future Internet Demand Scenarios,” Journal of Forest Economics 25(2016): 14-28.
  • “Global Trade Impacts of Increasing Europe’s Bioenergy Demand,” (with GC van Kooten) Journal of Forest Economics 23(2016): 27-44.
  • “The Economics of Forest Carbon Offsets,” (with GC van Kooten) Annual Review of Resource Economics 8(2016): 227-246.
  • “Back to the Past: Burning Wood to Save the Globe,” (with GC van Kooten) Ecological Economics 120(2015): 185-193.
  • “Economics of Co-Firing Coal and Biomass: An Application to Western Canada,” (with GC van Kooten) Energy Economics 48(2015): 7-17.
  • “Economic Consequences of Increased Bioenergy Demand,” (with GC van Kooten) Forestry Chronicle 90(2014): 636-642.
  • “Global Impacts of Russian Log Export Restrictions and the Canada–U.S. Lumber Dispute: Modeling Trade in Logs and Lumber,” (with GC van Kooten) Forest Policy and Economics 39(2014): 54-66.
  • “Wind versus Nuclear Options for Generating Electricity in a Carbon Constrained World: Strategizing in an Energy Rich Economy,” (with GC van Kooten and L Wong) American Journal of Agricultural Economics 95(2013): 505-511.