Tiff Macklem, the Governor of the Bank of Canada, addressed business leaders in Saskatoon, Saskatchewan. He emphasized the critical importance of Canada diversifying its trade partners and ensuring that Canada fundamentally changes its economic paradigm. His speech highlighted the significant disruptions in global trade and the impacts of U.S. monetary policy on Canada.
Macklem voiced strong alarm over U.S. President Donald Trump’s efforts to steer the course of the U.S. Federal Reserve. He warned that such actions “are raising questions about the continued independence of U.S. monetary policy.” This interference, he continued, represents a growing and very real threat, not only to the U.S. economy, but Canada’s as well.
At the same time, Macklem called on Canadian leaders from both business and government sectors to “chart a new course” for the economy. He argued that Canadian businesses lost their “mojo” once the recession was over after a sharp bounce-back in demand from the U.S. Without proactive measures from business leaders and policymakers, Macklem warned that Canada would not experience a bounce-back in economic growth.
In his speech, Macklem pointed to the need to reduce inter-provincial trade barriers and harmonize regulatory frameworks between provinces. He called for much faster project approval times in order to unlock the potential productivity benefits that infrastructure can provide to Canadians.
“The lesson from history is clear … central banks that have operational independence for monetary policy do a better job at delivering price stability for its citizens,” – Tiff Macklem.
In some ways, Macklem said, what we’re experiencing now is worse than the 2008-09 global financial crisis. What is important to underscore is that a U.S. economy collapse would very quickly spill over and affect Canada’s economy very substantially. After visiting along the border, he said that the United States will always be Canada’s largest trading partner. Most of all, he said, Canada needs to take an active role in creating new worldwide markets for its goods.
In spite of current difficulties, Macklem emphasized that Canada has started to heroically lay the groundwork to protect its economy from future shocks. More than that, he proclaimed now is the time for bold and terrific action.
“Canadian leaders – business, political and economic leaders – need to chart a new course. We should have been making these changes 15 years ago. But the next best time is now,” – Tiff Macklem.
He underscored the ways U.S. tariffs damage Canadian trade-sensitive industries. These measures, he argued, have forever derailed the nation’s economic growth trajectory. Macklem stated that threats to financial stability in the U.S. are already “starting to have consequences in financial markets,” which could ripple through other economies.
Macklem called for new and rejuvenated east-west transportation corridors and better infrastructure at Canada’s ports. Together, these amendments will help enhance Canada’s trade competitiveness by allowing Canadian goods to reach overseas markets more efficiently and safely. He focused on the need for Canada to re-tool its economy. Developing robust trade corridors is imperative to ensuring continued economic prosperity in the long term.
