Bank of Canada Governor Tiff Macklem says he welcomes efforts by the federal government in Ottawa to diversify the economy and protect it against global shocks and geopolitical risks.
In a media interview, Macklem said he is “encouraged” by efforts to adjust Canada’s economy and lessen its reliance on the neighbouring U.S.
The central bank governor added that he will continue to support the economy but that his mandate in on keeping inflation at a 2% annualized rate.
“We are in a more shock-prone world,” he said. “Our commitment is, we will be a source of stability. We will bring inflation back to target.”
The Bank of Canada operates independently from the federal government to avoid perceptions of political pressure when setting monetary policy.
But Macklem has not been hesitant to identify what he sees as long-standing vulnerabilities in the economy.
In particular, the governor has called for more business investment and productivity growth in Canada, which has lagged for more than a decade.
He has also called for diversifying Canada’s exports and boosting interprovincial trade.
“It’s been so much easier to send stuff north-south to the U.S. than to send it across the country. So, as a result, we don’t have as well developed an east-west transportation corridor,” he said.
Canada’s annual inflation rate stood at 2.4% in March as the global oil price shock hit gas pump prices across the country.
The central bank most recently elected to keep interest rates in Canada unchanged.
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