Newsquawk Logo

BoC Governor Macklem says restructuring the Canadian economy to cope with US tariffs, slower population, and the rise of AI will take years, and could be very painful

Governor Macklem's comments on Canada's economic restructuring highlight a cautious yet clear outlook for growth, emphasizing the pain of transition due to external pressures like US tariffs and demographic challenges.

Newsquawk StaffPublished On the live feed at — 4 more headlines followed before this page went public
Newsquawk headlinesUTC

Saudi Aramco will cut the price of its Arab Light grade for buyers in Asia by 30 cents a barrel to parity with the regional benchmark for March, according to Bloomberg citing a price list

US envoy Witkoff says delegations reached agreement whereby Russian Federation and Ukraine will exchange 157 PoWs

BoC Governor Macklem says restructuring the Canadian economy to cope with US tariffs, slower population, and the rise of AI will take years, and could be very painful

Meta (META) said to test standalone app for its Vibes videos, TechCrunch reports

Bayer’s (BAYN GY) Asundexian demonstrated a 26% reduction in stroke following non-cardioembolic ischemic stroke or high-risk transient ischemic attack, with no increase in ISTH major bleeding compared with placebo”

Open the platform and use it. The whole workspace is free to try, with no signup and no card. When you want the headlines arriving live instead of on a delay, Newsquawk Pro is £24.99 for 7 days.

Try the platform free
Free. No signup, no card.
  • Macklem urged policy makers and businesses to do all they could to adjust to the new challenge, saying Canada could not afford to fail.
  • As the Canadian economy works through this transition, growth will be modest.
  • Adding it all up, economy is forecast to grow—but it’s soft growth. Expect GDP growth to average only about 1¼% over the next two years.
  • Have to be careful not to misdiagnose economic weakness. Monetary policy should not try to compensate for lost supply.
  • Lowering interest rates in the face of weak economic activity risks stoking future inflation if the weakness is due to lower productive capacity rather than a cyclical downturn in demand.
  • And there is also a risk that overstimulating demand when the problem is structural could delay needed structural change.
  • In short, will be working hard to identify and assess the relative importance of cyclical and structural changes. Through it all, 2% inflation target will remain our ultimate policy beacon.
Context

His remarks suggest that while growth is expected, it will be modest and accompanied by a persistent focus on the 2% inflation target, which indicates that the Bank of Canada may resist aggressive rate cuts despite softness. This nuanced stance signals careful calibration of monetary policy to address structural issues without risking future inflation, thus maintaining a vigilant approach to both cyclical and structural factors in the economy.

External

Related headlines

The whole workspace, free to try.

Try it free
Newsquawk Logo

© 2026 Newsquawk. All rights reserved.