Tiff Macklem: Workers, jobs, growth and inflation - today and tomorrow

Remarks by Mr Tiff Macklem, Governor of the Bank of Canada, at the Winnipeg Chamber of Commerce, Winnipeg, Manitoba, 24 June 2024.

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

Central bank speech  | 
27 June 2024


Good afternoon. It's a pleasure to be here. Today is, of course, Saint-Jean-Baptiste Day, celebrated by many franco-Manitobans. Bonne Saint-Jean à toutes et à tous!

When I started as governor on June 3, 2020, the economy was in crisis. It was early in the pandemic and Canada's unemployment rate was 14%-the highest on record. Inflation was well below the 2% target-actually, it was slightly negative. The immediate priority was to avoid deflation and get the economy back on its feet.

But since 2022, we've been fighting a new battle - high inflation. When the economy reopened, the combination of gummed up global supply chains, a strong surge in demand and Russia's unprovoked invasion of Ukraine sent inflation sharply higher. It peaked at just over 8% in June 2022. For more than two years, our focus has been getting inflation back down.

We've come a long way. Monetary policy has worked, and it is continuing to work. Since January, inflation has been below 3%, and our measures of underlying inflation have eased steadily. This has increased our confidence that inflation will continue to move closer to the 2% target this year. And earlier this month, we lowered our policy interest rate for the first time in four years.

Low, stable and predictable inflation allows Canadians to spend and invest with confidence. It lowers uncertainty and encourages long-term investment. And it contributes to sustained job creation and greater productivity. This in turn leads to improvements in our standard of living. That's why price stability is our number one priority.

A key ingredient for price stability is a healthy labour market-one in which Canadians have the jobs they want, employers have the workers they need, and real wages grow in line with productivity. Economists call this maximum sustainable employment-the highest level of employment the economy can sustain without triggering inflationary pressures.