Tiff Macklem: The benefits of an inclusive economy

Remarks (delivered virtually) by Mr Tiff Macklem, Governor of the Bank of Canada, to the Universities of Atlantic Canada, Halifax, Nova Scotia, 13 May 2021.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Introduction

Thank you for the invitation to speak to you today. As a former university dean, I am particularly glad to reconnect with so many students. I miss your relentless curiosity, your boundless energy and your determination to build a better world. I only wish I could be with you in person. I realize that yet another virtual talk on top of your virtual classes is less than ideal. So thank you for joining me. And let me congratulate every one of you for your adaptability, your ingenuity and your spirit of community through this pandemic.

I am also grateful for the invitation because I want to discuss an important topic with you. That topic is diversity and inclusion-at the Bank of Canada, within the economics and finance profession and in the economy as a whole.

Now, you may be asking yourself, why does a central bank governor, whose job is to control inflation and foster a stable and efficient financial system, want to talk to us about diversity and inclusion?

The answer is simple. Diversity and inclusion are critical to our success as a central bank in the service of Canadians. They are essential for the economics profession to attract the best talent and foster ingenuity and innovation. And they matter for the whole economy. A more inclusive economy is a bigger economy, a more prosperous economy with more room to grow without creating inflationary pressures.

There is, of course, a moral imperative to pursuing diversity and inclusion. It's simply the right thing to do. But I will leave that topic to others. I am here to talk about the competitive imperative, the economic imperative.

Your next question might be why am I talking about this now? This issue is not new, and we are still in the midst of a global pandemic. But one of the most striking features of the pandemic has been the way it has worsened inequalities in our society. Young people like you, low-wage earners, women and racialized Canadians have borne the brunt of the job losses because they hold so many of the jobs in the hardest-hit sectors. Output in high-contact service sectors-such as retail stores and restaurants-remains almost 20 percent below where it was before the pandemic. Meanwhile, the combined output of the rest of the economy is now slightly above its pre-pandemic level.