Bank of Canada governor Tiff Macklem is sounding the alarm on Canada’s productivity problem and urging policymakers to dig into why the country struggles with low business investment.
According to prepared remarks he delivered to the Winnipeg Chamber of Commerce Monday, Macklem hailed the strengths of Canada’s job market, including high labour force participation, strong immigration and a solid education system.
The governor also reflected on the fact that the labour market has adjusted relatively well to higher interest rates, albeit some workers, including newcomers and young people, have been harder hit by rising unemployment.
But looking at the longer-term economic picture, he warned productivity is the country’s weakness, noting that on average, businesses invest much less per worker in Canada than they do in the United States.
“Our Achilles heel is productivity. We have been very good at growing our economy by adding workers. We have been much less successful at increasing output per worker,” he said.
The governor’s comments echoed the central message of a speech senior deputy governor Carolyn Rogers gave in March, where she warned addressing low productivity has become a national emergency.
The issue of productivity is top-of-mind for many economists concerned that low business investment will depress living standards in the country.
Macklem said figuring out how to make Canada a better place to invest is critical to supporting non-inflationary economic growth and higher living standards.
Productivity growth, he said, helps businesses compete in global markets and supports higher wages for workers.
“And with an aging population and limits to how many immigrants we can successfully absorb each year, improving our productivity growth will become more important to sustaining trend growth,” Macklem said.
Discussions needed
In a news conference later on Monday, the governor acknowledged that the solutions to Canada’s productivity problem are not in the central bank’s hands.
“But our message is if you want more non-inflationary growth, we’re going to need a concerted discussion between businesses, governments, and academics, civil society, on how are we going to get productivity growth up in Canada,” he said.
Macklem offered some areas policymakers could tackle, including interprovincial trade barriers and Canada’s slow regulatory approvals.
The governor’s remarks come less than three weeks after the Bank of Canada delivered the first interest rate cut in more than four years.
Encouraged by slowing inflation, the central bank lowered its policy rate by a quarter of a percentage point, bringing it to 4.75 per cent.
Macklem reiterated on Monday that if the economy and inflation evolve broadly in line with the central bank’s expectations, it’s “reasonable” to expect more rate cuts.
Canada’s inflation rate was 2.7 per cent in April. Inflation data for May is set to be released Tuesday by Statistics Canada.
High interest rates have slowed down the economy and cooled the job market, as well.
The unemployment rate has steadily increased over the last year, reaching 6.2 per cent in May.
Health Canada has authorized Novavax’s updated COVID-19 vaccine that protects against currently circulating variants of the virus.
The protein-based vaccine, called Nuvaxovid, has been reformulated to target the JN.1 subvariant of Omicron.
It will replace the previous version of the vaccine, which targeted the XBB.1.5 subvariant of Omicron.
Health Canada recently asked provinces and territories to get rid of their older COVID-19 vaccines to ensure the most current vaccine will be used during this fall’s respiratory virus season.
Earlier this week, Health Canada approved Moderna’s updated mRNA COVID vaccine.
It is still reviewing Pfizer’s updated mRNA vaccine, with a decision expected soon.
This report by The Canadian Press was first published Sept. 19, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
Note to readers: This is a corrected story. A previous version erroneously described the Novavax vaccine as an mRNA shot.
HALIFAX – The federal Fisheries Department says an endangered North Atlantic right whale has become entangled in gear in the Gulf of St. Lawrence.
The department says the whale was sighted Wednesday by a Transport Canada aerial surveillance team northeast of the Gaspé Peninsula, off Anticosti Island.
Officials say it’s not known what type of gear has entangled the whale or where the gear came from.
Based on observation, experts at the New England Aquarium have confirmed the whale is a female known as Chiminea.
The department says it is continuing to monitor the area and if the whale is located and conditions allow, efforts will be made to disentangle the animal.
Last October, the North Atlantic Right Whale Consortium estimated there were 356 North Atlantic right whales left on the planet.
This report by The Canadian Press was first published Sept. 19, 2024.
VANCOUVER – Canadian pop icon Nelly Furtado has been named one of three headliners for the opening ceremony of the upcoming Invictus Games.
Furtado, from Victoria, will share the stage with alt-pop star Roxane Bruneau of Delson, Que., and American singer-songwriter Noah Kahan.
They’ll be part of the show that opens the multi-sport event in Vancouver and Whistler, B.C., in February.
The Invictus Games sees wounded, injured, and sick military service members and Veterans compete in 11 disciplines.
The Vancouver Whistler 2025 Games will be the first of seven editions to feature winter adaptive sports, including alpine skiing, Nordic skiing, skeleton and wheelchair curling.
British Columbia’s Lower Mainland will host the Invictus Games from Feb. 8-16.
This report by The Canadian Press was first published Sept. 19, 2024.
