Bank of Canada Governor Tiff Macklem says the country’s labour market remains strong and
that the central bank doesn’t foresee significant job losses over the next year.
Speaking at Toronto Metropolitan University, Macklem said that Canada's job market remains
relatively healthy despite signs of an economic slowdown and the potential for a recession in the
next year.
“We don’t expect a large increase in unemployment in the way we’ve seen in past recessions,”
said Macklem. “We’re not expecting high unemployment by historical standards.”
However, Macklem added that the labour market needs to rebalance to help bring inflation down
from its current 30-year high. Canada’s unemployment rate is now at 5.2%.
Macklem said businesses struggling to find workers can’t keep up with demand for goods and
services. The current imbalance is largely due to an aging population, increasing retirement
levels, and low immigration during the pandemic, he said.
To get demand and supply back in line, Macklem said a slowdown in the job market is needed.
Policies that increase the number of available workers could also help to ease inflation, he
added.
Last month, the Bank of Canada raised its key interest rate for a sixth consecutive time this year
to 3.75%. Canada’s inflation rate currently stands at 6.9%, well above the central bank’s 2%
target.
