OTTAWA, O.N. – In a world facing trade disputes, supply chain disruptions, and extreme weather, the head of the Bank of Canada says the institution needs to evolve how it manages the Canadian economy, acknowledging the pain a new generation has felt from high inflation and the ongoing housing crisis.
Tiff Macklem, the governor of the Bank of Canada, made the remarks this week after holding the country’s benchmark interest rate steady for a second time. While the bank successfully fought down the last surge of post-pandemic inflation without causing a major recession, Macklem noted a new crisis is already here: the threat of new U.S. tariffs under President Donald Trump.
For Canadians, including those in the Skeena region who have felt the squeeze of rising prices, Macklem’s comments signal a shift in thinking at the country’s most powerful financial institution.
“Unfortunately, a whole new generation of Canadians now know what inflation feels like, and they didn’t like it one bit,” Macklem said in an interview with The Canadian Press.
While defending the bank’s core mission of keeping inflation at a 2% target, he acknowledged that the bank’s mandate—which is up for review next year—could be built out to better address issues like housing affordability.
“Monetary policy itself can’t make homes more affordable,” Macklem noted, explaining that high rates make mortgages expensive while low rates can drive up housing prices. However, he said he is reflecting on the role monetary policy can play to “smooth out some of that adjustment” when the economy is disrupted.
Macklem called the modern economy a more “shock-prone” world. He said the Bank of Canada can no longer dismiss all supply disruptions—like trade conflicts or supply chain snags that affect the cost of goods in Northern B.C.—as temporary issues. Instead, he says the bank is now using a more “nuanced playbook” that relies on faster, more granular data to understand what’s happening on the ground.
Ultimately, Macklem stressed the bank’s primary role remains controlling inflation. “The economy does not work well when inflation is high,” he said. “The primary role of the Bank of Canada is to ensure that Canadians maintain confidence in price stability.”
