The Governor of the Bank of Canada, Tiff Macklem, delivered his final speech of 2024 in Vancouver, addressing the Greater Vancouver Board of Trade. He reflected on the past two years' economic journey and outlined future priorities for maintaining price stability in Canada.
Macklem recalled the economic conditions of December 2022 when inflation was nearing 7% and policy rates were increased to combat rising prices. Today, he noted that inflation has returned to the target rate of 2%, and recent cuts in policy rates have aimed to stimulate household spending.
"We’ve come a long way in the past two years," Macklem stated, emphasizing that while inflation is low again, efforts must continue to stabilize it around the 2% target. He highlighted current economic conditions where GDP growth has slowed but consumer spending and housing activity have picked up due to lower interest rates.
Macklem addressed potential risks such as elevated wage increases impacting inflation or possible new tariffs from the incoming US administration affecting Canadian exports. "With inflation back to target... we want to see growth and hiring pick up," he said.
Reflecting on lessons from the pandemic, Macklem mentioned a review by the Bank of Canada on its policy actions during that period. "Our pandemic response was effective," he said but emphasized learning from rapid inflation post-pandemic and understanding supply dynamics better.
Looking forward, Macklem acknowledged an uncertain future influenced by structural changes like deglobalization and digitalization. For 2025, he set three priorities: international cooperation through Canada's G7 presidency, improving analytical tools with richer data, and reviewing Canada's monetary policy framework.
He concluded by stressing transparency and accountability in monetary policy decisions: "We want to earn the public’s trust...by delivering low and stable inflation." The Bank aims to maintain public confidence through clear communication and engagement with Canadians.
Macklem expressed gratitude towards his colleagues for their assistance in preparing his speech.