Latest news with #Macklem
Toronto Sun
18-06-2025
- Business
- Toronto Sun
Diversifying trade key to building 'resilience' against U.S. tariffs: Macklem
Published Jun 18, 2025 • 3 minute read Governor of the Bank of Canada Tiff Macklem delivers a speech at a Calgary Economic Development event in Calgary, March 20, 2025. Photo by Jeff McIntosh / The Canadian Press OTTAWA — Bank of Canada governor Tiff Macklem is encouraging businesses to explore export markets beyond the United States to make the economy less vulnerable to current and future trade disputes. This advertisement has not loaded yet, but your article continues below. THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. 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Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account Share your thoughts and join the conversation in the comments Enjoy additional articles per month Get email updates from your favourite authors Don't have an account? Create Account Macklem, speaking to a business crowd in St. John's, N.L., on Wednesday, said it was 'very welcome news' that Prime Minister Mark Carney and U.S. President Donald Trump agreed at the G7 Summit earlier this week to nail down a new trade and security deal within 30 days. He said in prepared remarks that progress toward a new trade deal is 'encouraging,' but later said in a moderated question-and-answer period that Canada's economy faces bigger problems in an increasingly 'fragmented world.' Trade patterns were already shifting before Trump was re-elected late last year, Macklem noted, and other global conflicts are also forcing businesses to reorient supply chains. 'I really hope we get a deal, I really hope it's a good deal, but that's not going to solve all our problems,' he said. Your noon-hour look at what's happening in Toronto and beyond. By signing up you consent to receive the above newsletter from Postmedia Network Inc. Please try again This advertisement has not loaded yet, but your article continues below. Disruptions during COVID-19 showed Canadian firms the consequences of not having diverse supply chains, Macklem said. And he said the current trade dispute is demonstrating how vulnerable businesses can be without diverse export markets. 'Growing new markets for our exports builds scale and competitiveness. But there's an added imperative — diversification adds resilience,' he said in his speech. Macklem used Newfoundland and Labrador as a case study for his point, noting that only a third of the province's goods exports head to the United States compared with roughly three-quarters for the rest of Canada. Most of the province's oil is now shipped to Europe and other countries, for instance, and services exports are boosting the St. John's tech sector, he noted. This advertisement has not loaded yet, but your article continues below. Macklem said the rest of Canada has an opportunity, particularly among services exports, to expand trade beyond the United States. Efforts to build national infrastructure and tear down interprovincial trade barriers would also make diversifying goods exports easier, he said. The United States will always be Canada's biggest trading partner, Macklem said, but he believes the recent tariff dispute has awoken businesses and policymakers to long-standing vulnerabilities in the economy by being so focused on cross-border trade. 'This is something we've been talking about for a long time in this country,' he said during the Q&A. 'The reality is, we're just leaving money on the table by not building our own internal market, by not developing our overseas markets.' This advertisement has not loaded yet, but your article continues below. The Bank of Canada held its benchmark interest rate steady at 2.75 per cent for the second time in a row earlier this month. The central bank's next decision is set for July 30, and Macklem reiterated that future cuts could be in the cards if economic growth weakens further but inflation remains contained in the trade dispute. While labour market impacts are largely concentrated in trade-sensitive sectors so far and other industries are still showing some growth, Macklem said that, 'if demand stays soft, at some point more businesses will cut jobs.' Tracking inflation's response to tariffs is 'complicated,' the central bank head noted. A slower economy dampens price pressures but the tariffs themselves can make goods more expensive for Canadians. This advertisement has not loaded yet, but your article continues below. While the removal of the consumer carbon price helped push inflation down to 1.7 per cent in April, inflation excluding taxes was 2.3 per cent in the month, which Macklem said was 'slightly stronger' than the Bank of Canada expected. He said core measures of inflation were also showing 'unusual volatility' and 'could be firmer' than the central bank thought. Macklem pointed to higher goods prices affecting the underlying inflation figures, which could be starting to reflect new costs related to tariffs. 'The prospect of a new Canada-U.S. trade deal offers hope that tariffs will be removed. But until we have a deal, inflation will be affected by both U.S. tariffs and Canadian counter-tariffs,' he said. NHL Columnists Canada Editorial Cartoons Soccer
Winnipeg Free Press
18-06-2025
- Business
- Winnipeg Free Press
Diversifying trade key to building ‘resilience' against U.S. tariffs: Macklem
OTTAWA – Bank of Canada governor Tiff Macklem is encouraging businesses to explore export markets beyond the United States to make the economy less vulnerable to current and future trade disputes. Macklem, speaking to a business crowd in St. John's, N.L., on Wednesday, said it was 'very welcome news' that Prime Minister Mark Carney and U.S. President Donald Trump agreed at the G7 Summit earlier this week to nail down a new trade and security deal within 30 days. 'The recent progress toward a new trade deal is encouraging, and we are following developments closely. We are all invested in the future of the trade relationship between Canada and the United States,' he said in prepared remarks. But Macklem also stressed the importance of diversifying to new export markets given recent global trade upheaval. Disruptions during COVID-19 showed Canadian firms the consequences of not having diverse supply chains, Macklem said. And he said today's trade dispute is demonstrating how vulnerable businesses can be without diverse export markets. 'Growing new markets for our exports builds scale and competitiveness. But there's an added imperative – diversification adds resilience,' he said. Macklem used Newfoundland and Labrador as a case study for his point, noting that only a third of the province's goods exports head to the United States compared to roughly three-quarters for the rest of Canada. Most of the province's oil is now shipped to Europe and other countries, for instance, and services exports are boosting the St. John's tech sector, he noted. Macklem said the rest of Canada has an opportunity, particularly among services exports, to expand trade beyond the United States. Efforts to build national infrastructure and tear down interprovincial trade barriers would also make diversifying goods exports easier, he said. 'The United States will always be our single biggest trading partner, but we can improve our resilience and grow our prosperity by expanding both our internal trade and overseas markets for our products,' he said. The Bank of Canada held its benchmark interest rate steady at 2.75 per cent for the second time in a row earlier this month. The central bank's next decision is set for July 30, and Macklem reiterated that future cuts could be in the cards if economic growth weakens further but inflation remains contained in the trade dispute. While labour market impacts are largely concentrated in trade-sensitive sectors so far and other industries are still showing some growth, Macklem said that, 'if demand stays soft, at some point more businesses will cut jobs.' Monday Mornings The latest local business news and a lookahead to the coming week. Tracking inflation's response to tariffs is 'complicated,' the central bank head noted. A slower economy dampens price pressures but the tariffs themselves can make goods more expensive for Canadians. While the removal of the consumer carbon prices helped push inflation down to 1.7 per cent in April, inflation excluding taxes was 2.3 per cent in the month, which Macklem said was 'slightly stronger' than the Bank of Canada expected. He said core measures of inflation were also showing 'unusual volatility' and 'could be firmer' than the central bank thought. Macklem pointed to higher goods prices affecting the underlying inflation figures, which could be starting to reflect new costs related to tariffs. 'The prospect of a new Canada-U.S. trade deal offers hope that tariffs will be removed. But until we have a deal, inflation will be affected by both U.S. tariffs and Canadian counter-tariffs,' he said. This report by The Canadian Press was first published June 18, 2025.
Calgary Herald
12-06-2025
- Business
- Calgary Herald
Don't assume further rate cuts from the Bank of Canada, Poloz warns
Former Bank of Canada governor Stephen Poloz warned markets should not be assuming further rate cuts by the central bank, which will remain primarily focused on the inflation risk caused by tariffs over a weakening economy. Article content 'Inflation has been kind of firming lately, using the core measures the Bank of Canada pays attention to,' said Poloz, now special adviser to Osler, Hoskin & Harcourt LLP, during a webinar on Tuesday. 'And the counter tariffs that the government has put in place will start boosting inflation in the next couple of months.' Article content Article content On June 4, the Bank of Canada decided to hold its policy rate for the second straight time at 2.75 per cent, as it assesses how tariffs are affecting the Canadian economy. Article content Bank of Canada governor Tiff Macklem said it was too early to see the impact of retaliatory tariffs on the published CPI data but expects to see those effects in the coming months. The Government of Canada imposed 25 per cent tariffs on almost $60 billion worth of United States goods in response to U.S. tariffs, although certain exemptions apply. Carney has also signalled further potential retaliatory tariffs. Article content Poloz said the central bank had to learn a hard lesson during the post-pandemic era, when inflation unexpectedly jumped higher than expected. At the time, Macklem said inflation would be 'transitory.' Article content Article content 'The central bank said, 'Don't worry, that's a transitory thing.' Well, transitory turned out to be two years,' said Poloz. 'Having learned that lesson the hard way, I think central banks are going to be much more preoccupied with inflation risks.' Article content Article content The Canadian economy grew by 2.2 per cent in the first quarter of this year, mainly as the result of a rise of exports, as businesses pulled forward their inventory to get ahead of U.S. President Donald Trump's tariff announcements. Macklem said he expects growth in the second quarter to be considerably weaker, while many economists are forecasting a recession this year. Article content The unemployment rate also hit seven per cent in May, as tariff uncertainty continued to slow hiring demand and the manufacturing sector showed significant job losses in the last few months. Article content Article content Poloz said the deterioration in the labour market is a 'recessionary indicator' and he expects further layoffs as the result of tariffs in the coming months. This will be a point of concern for the Bank of Canada but Poloz noted that governments have shown a willingness to use fiscal policy to address the economic damage brought on by tariffs, while the central bank can remain focused on price stability.
Yahoo
11-06-2025
- Business
- Yahoo
Don't assume further rate cuts from the Bank of Canada, Poloz warns
Former Bank of Canada governor Stephen Poloz warned markets should not be assuming further rate cuts by the central bank, which will remain primarily focused on the inflation risk caused by tariffs over a weakening economy. 'Inflation has been kind of firming lately, using the core measures the Bank of Canada pays attention to,' said Poloz, now special adviser to Osler, Hoskin & Harcourt LLP, during a webinar on Tuesday. 'And the counter tariffs that the government has put in place will start boosting inflation in the next couple of months.' Canada's inflation rate came in at 1.7 per cent in April, but measures of core inflation came in at three per cent and above. On June 4, the Bank of Canada decided to hold its policy rate for the second straight time at 2.75 per cent, as it assesses how tariffs are affecting the Canadian economy. Bank of Canada governor Tiff Macklem said it was too early to see the impact of retaliatory tariffs on the published CPI data but expects to see those effects in the coming months. The Government of Canada imposed 25 per cent tariffs on almost $60 billion worth of United States goods in response to U.S. tariffs, although certain exemptions apply. Carney has also signalled further potential retaliatory tariffs. Poloz said the central bank had to learn a hard lesson during the post-pandemic era, when inflation unexpectedly jumped higher than expected. At the time, Macklem said inflation would be 'transitory.' 'The central bank said, 'Don't worry, that's a transitory thing.' Well, transitory turned out to be two years,' said Poloz. 'Having learned that lesson the hard way, I think central banks are going to be much more preoccupied with inflation risks.' The Canadian economy grew by 2.2 per cent in the first quarter of this year, mainly as the result of a rise of exports, as businesses pulled forward their inventory to get ahead of U.S. President Donald Trump's tariff announcements. Macklem said he expects growth in the second quarter to be considerably weaker, while many economists are forecasting a recession this year. The unemployment rate also hit seven per cent in May, as tariff uncertainty continued to slow hiring demand and the manufacturing sector showed significant job losses in the last few months. Poloz said the deterioration in the labour market is a 'recessionary indicator' and he expects further layoffs as the result of tariffs in the coming months. This will be a point of concern for the Bank of Canada but Poloz noted that governments have shown a willingness to use fiscal policy to address the economic damage brought on by tariffs, while the central bank can remain focused on price stability. Poloz said whether Canada's central bank cuts or not will depend on what is causing the economy's slowdown. 'If it's just uncertainty that's causing companies to stop, pull back, then maybe cutting rates helps,' he said. But if tariffs are causing a more permanent structural issue in the Canadian economy, then monetary policy could prove ineffective. 'Cutting rates in that context just boosts demand with no supply to meet it, and can actually cause inflation to go up,' said Poloz. 'Markets should not be assuming these things,' he added. 'You saw the ECB (European Central Bank), they cut rates, but Europe has not retaliated on the tariffs, so they have less inflation risk for them, than we do over here.' In the meantime, uncertainty brought by Trump's trade war will continue, with a pullback on investment set to continue. Poloz said global income could drop by as much as $40 trillion due to Trump's tariff regime over the next few years. On the fiscal policy side, Poloz said the Liberal government is 'off to a promising start' with announcements on internal trade, increased defence spending, legislation on big projects and rhetoric on making Canada 'an energy superpower.' Poloz said he is seeing growing optimism in boardrooms, but added that the West remains understandably skeptical. Prime Minister Mark Carney said his government will present a budget in the fall and has promised to change the way its presented, by splitting operating and capital spending into two separate categories, which has faced criticism that it would complicate transparency on the deficit. David Rosenberg: Surprise job gains in Canada conceal economic rot underneath 'Grinding' rise in unemployment rate means Bank of Canada will start cutting rates again 'When someone presents a budget, they don't get to say we're going to do this and that's going to cause the economy to grow enough that actually it won't cause a deficit,' said Poloz. 'Convention is you say what you're going to do, then of course you cross your fingers and hope it works, it makes the economy bigger, and over time the revenues for the government grow and the deficit goes away.' 'But we all know that some of these things are so critical for economic growth, they're guaranteed to pay off,' he added. • Email: jgowling@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Toronto Star
07-06-2025
- Business
- Toronto Star
Bank of Canada head Tiff Macklem says mandate should evolve in a ‘shock-prone' world
OTTAWA — Tiff Macklem is wearing an Edmonton Oilers pin as he reflects on coming very close to beating big odds. It's a significant day for the governor of the Bank of Canada: he's just laid out his reasons to the entire country and a global audience for keeping the central bank's benchmark interest rate steady for a second straight time. That night is also Game 1 of the NHL's Stanley Cup finals; Macklem ends his press conference with a hearty 'Go Oilers!' ARTICLE CONTINUES BELOW It's a rematch from last year's heartbreak, when the Oilers came oh-so-close to mounting a seemingly impossible four-game comeback against the Florida Panthers, only to fall short by a single goal in Game 7. Macklem, too, was almost safe to declare victory last year. He had just about secured a coveted 'soft landing' for Canada's economy — a rare feat that sees restrictive monetary policy bring down surging levels of inflation without tipping the economy into a prolonged downturn. 'We got inflation down. We didn't cause a recession,' Macklem said in an interview with The Canadian Press after the rate announcement Wednesday. 'And, to be frank, until President (Donald) Trump started threatening the economy with new tariffs, we were actually seeing growth pick up.' Fresh out of one crisis, the central bank now must contend with another in U.S. tariffs. Five years into his tenure as head of the Bank of Canada, Macklem said he sees the central bank's role in stickhandling the economy — as well as Canada's role on the world stage — evolving. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW Many Canadians have become more familiar with the Bank of Canada in recent years. After the COVID-19 pandemic recovery ignited inflation, the central bank's rapid tightening cycle and subsequent rate cuts were top-line news for anxious Canadians stressed about rising prices and borrowing costs. That was all in pursuit of meeting the central bank's inflation target of two per cent, part of a mandate from the federal government that's up for review next year. Macklem said the past few years have led the Bank of Canada to scrutinize some of its metrics, like core inflation and how it responds to supply shocks in the economy. But he defends keeping the bank's inflation target, particularly at a time of global upheaval. 'Our flexible inflation targeting framework has just been through the biggest test it's ever had in the 30 years since we announced the inflation target,' he said. 'I'm not going to pretend it's been an easy few years for anybody. But I think the framework has performed well.' ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW Macklem said, however, that he sees room to build out the mandate to address other areas of concern from Canadians, such as housing affordability. Whether it's the high cost of rent or a mortgage, or surging prices for groceries and vehicles, Macklem said the past few years have been eye-opening to Canadians who weren't around the last time inflation hit double digits in the 1980s. 'Unfortunately, a whole new generation of Canadians now know what inflation feels like, and they didn't like it one bit,' he said. Monetary policy itself can't make homes more affordable, he noted — in a nutshell, high interest rates make mortgages more expensive while low rates can push up the price of housing itself because they stoke demand. But Macklem said one of the things he's reflecting on is that inflation can get worse when the economy isn't operating at its potential or when it's facing great disruption. 'There is a role for monetary policy to smooth out some of that adjustment — support the economy while ensuring that inflation is well-controlled.' ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW He didn't offer suggestions on how the mandate might expand to address housing affordability specifically, but said 'the work is ongoing' and will be settled in meetings with the federal government next year. Right now, he's trying to make sure that the economic impacts from Canada's tariff dispute with the United States don't result in prolonged inflation. The Bank of Canada is not alone in debating how monetary policy ought to respond in what Macklem called a more 'shock-prone' world. The G7 Finance Ministers' Summit in Kananaskis, Alta., last month also featured round tables with the bloc's central bankers. Conversations at the summit were 'candid,' Macklem said, and though the nations issued a joint statement at the close of the event, that doesn't mean they agreed on everything. 'International co-operation, to be honest, has never been easy. It is particularly difficult right now, but that doesn't make it less important. That makes it more important,' he said. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW 'I do think Canada, as the chair of the G7, has a leadership role to play.' The Bank of Canada is also changing the way it has conversations with Canadians and the kind of data it considers. A day after the June interest rate decision, deputy governor Sharon Kozicki told a Toronto business crowd how the central bank is using data more nimbly, relying heavily on surveys and more granular information to make monetary policy decisions in an uncertain time. These sources offer a faster way to see what's happening on the ground in the economy than traditional statistical models allow. Macklem said the central bank would previously have dismissed most supply shocks as transitory — likely to pass without the need for central bank adjustments, such as rising and falling oil prices. But he said the Bank of Canada needs to be running a more 'nuanced playbook' now to respond to some increasingly common shocks: supply chain disruptions, trade conflicts and extreme weather to name a few. An overheating economy running up against a supply disruption is the kind of inflationary fire Macklem is trying to avoid in this latest crisis. 'The economy does not work well when inflation is high,' he said. 'And the primary role of the Bank of Canada is to ensure that Canadians maintain confidence in price stability. That's all we can do for the Canadian economy. That's what we can do for Canadians. And that's what we're focused on.' ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW Later in the day on Wednesday, the Edmonton Oilers took Game 1 of the Stanley Cup finals. The Canadian team was down but roared back to win 4-3 in overtime. It's still early in the Bank of Canada's response to the latest global shock. But with any luck, Macklem's team might also get a leg up with lessons learned the last time they faced big odds. This report by The Canadian Press was first published June 7, 2025. Politics Headlines Newsletter Get the latest news and unmatched insights in your inbox every evening Error! Sorry, there was an error processing your request. There was a problem with the recaptcha. Please try again. Please enter a valid email address. Sign Up Yes, I'd also like to receive customized content suggestions and promotional messages from the Star. You may unsubscribe at any time. By signing up, you agree to our terms of use and privacy policy. This site is protected by reCAPTCHA and the Google privacy policy and terms of service apply. Politics Headlines Newsletter You're signed up! You'll start getting Politics Headlines in your inbox soon. Want more of the latest from us? Sign up for more at our newsletter page.
