Tiff Macklem: Restoring labour market balance and price stability

Remarks by Mr Tiff Macklem, Governor of the Bank of Canada, at the Public Policy Forum, Toronto, Ontario, 10 November 2022.

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

Good morning. It's great to be back in Toronto to discuss an issue that matters to everyone-the Canadian labour market. I'm particularly pleased to be on a university campus for a speech that explores the future of workers and jobs. And I want to thank the Public Policy Forum for inviting me to engage with students, researchers and thought leaders on this important issue.

My Governing Council colleagues and I meet with stakeholders of all kinds-business leaders and community groups, unions and students. And everywhere we go, we get many of the same questions. First, people ask about inflation and interest rates. Controlling inflation is our top priority, and I'll get into that today. Everyone also wants to talk about jobs and the labour market, and three questions regularly come up: Why can't businesses find enough workers? Are we going into a recession, and does that mean a big rise in the unemployment rate? And what is the Bank of Canada's role in supporting maximum sustainable employment?

So today I want to address these questions. I will tackle them in three parts. First, I want to outline how inflation and the labour market are linked. I'll explain that returning to low and stable inflation is the best way to achieve maximum sustainable employment. Our mandate is explicit about that. Second, I want to highlight how the Canadian labour market was hit by COVID-19, how it recovered and what we expect in the coming months. Finally, I want to discuss structural changes in the labour market, such as the aging of the population, that we'd be grappling with even if the pandemic hadn't happened. I will discuss what we are watching and what Canadian governments and businesses can do to help grow the supply of labour.