Bank of Canada governor Tiff Macklem says Canada needs to seize opportunities to secure its place in the changing global trade landscape.
In a speech to the Canada-UK Chamber of Commerce in London on Tuesday, he said international trade is being rewired, recast and redirected.
“We need to be effective at the international table to influence how trade is recast and redirected,” Macklem said in prepared remarks.
The governor said Canada needs to invest in trade infrastructure and reduce trade barriers as shifting supply chains represent risks as well as opportunities for Canadian business.
Canada needs to invest in the electricity grid and transportation infrastructure, while businesses need to invest in new equipment and innovation to remain competitive, he says.
Macklem said global trade has slowed and the growth that is happening is shifting from goods to services, while China’s role is also changing.
“We need to build better relationships, produce the products people want to buy, build and maintain the infrastructure to get those products to market, and boost our productivity to compete globally,” he said.
Macklem noted that the Bank of Canada doesn’t set trade policy, but it needs to understand the shifts because of how they drive costs and inflation.
“Going forward, with globalization slowing, the cost of global goods may not decline to the same degree. All things equal, this could put more upward pressure on inflation,” he said.
The speech by the governor comes after the central bank cut its key interest rate target last week by a quarter of a percentage point to 4.25 per cent.
This report by The Canadian Press was first published Sept. 10, 2024.
Craig Wong, The Canadian Press